Boom times in non-residential building appear to be well and truly over, according to the latest batch of data from the ABS.
- Residential building approvals appear to have peaked
- UBS downgrades house price forecast, expecting prices to fall more than 5% over the year
- Commercial property sector continues to weaken, approvals now down 20% a year ago
A housing construction industry that continues to invest in permits for new projects
According to the latest data release from the ABS, new housing approvals rose for the second month in the year to April as detached dwellings increased, offsetting a slip in the number of new units.
Total building approvals picked up to 228,194 last month, a 1.5% increase on a year earlier, when the total was 224,764, official figures on Wednesday showed. It was the second month of year-on-year increase after 17 straight months of decline.
Unit approvals, which vary according to the timing of individual applications, dropped 11.6% to 8,083. On a monthly basis, new detached house approvals rose 0.7% to 10,618.
The approvals figures also show the growing preference for medium- and lower-density unit projects, as developers focus their offerings on the predominantly local market of downsizing owner-occupiers who want to stay close to the suburban areas in which they have established networks and relationships.
Over the 12 months to April, new townhouse approvals rose 7.4% from the same period a year earlier to 36,287, while approvals of apartments in high-rise blocks – 4 storeys or more – fell 3% to 63,465.
Approvals in commercial construction fall
The fall has triggered concerns about the sustainability of investment in facilities such as retail and offices.
The total value of private-sector non-residential investment approvals dropped 24% month-on-month before seasonal adjustment to $1.77 billion, the weakest monthly total since April 2014, when it was $1.43 billion.
Over the 12 months to April, the total was $34.5 billion.