Australian building approvals rose by 1.5 per cent in September, defying expectations of a more pronounced slowdown.
In stronger than expected figures, September approvals gained 0.2 per cent from September 2016 -- rising to 18,849 in seasonally adjusted terms.
The ABS figures, released Thursday, were a surprising result for the otherwise lacklustre housing sector with approvals for houses rebounding 0.6 per cent from August -- 2.1 per cent higher than a year ago.
More impressive was the 2.6 per cent expansion in apartment approvals in September, rising for the second consecutive month. Detached housing approvals rose 0.8 per cent.
[Related reading: Building Approvals Show Modest Growth in August]“Over the wider horizon of the whole quarter, today’s figures are also quite favourable. During the September 2017 quarter overall, total approvals for new dwellings were up by 5.1 per cent. This was driven by an expansion of 7.6 per cent in multi-unit projects," HIA senior economist Shane Garrett said.
Activity on the apartment side of the market has come under considerable pressure due to a number of obstacles being put in the way of foreign investors in residential property. Today’s figures do indicate that home building is receiving some support from the strong pace of job creation in several key markets."
[Related reading: Sydney House Values Fall for the First Time in 17 Months]Just two states experienced a decline in new dwelling approvals during the month of September 2017: Queensland (-17.0 per cent) and Victoria (-2.0 per cent).
“On balance, new home building activity will trend downwards over the next couple of years, probably bottoming out in 2019,” Garrett said.