National building approvals remained relatively flat for the month of May, while Victoria led with a solid increase of 14.4 per cent in dwellings approved for construction.
Following a weak start to 2019, the number of total dwellings approved across the country increased by a slight 0.7 per cent in May, seasonally adjusted.
The latest Australian Bureau of Statistics data reveals the May building approval figures were slightly above expectation.
And while the number of new houses recorded a drop of 0.3 per cent in May, the latest ABS figures show building approvals for units and apartments, the sector worst hit by the downturn, increased by 1.2 per cent for the month.
Victoria led the charge with its 14.4 per cent uptick for the month, followed by the ACT with a rise of 7.2 per cent.
The volume of approvals remained flat in New South Wales.
ABS Director of Construction Statistics Daniel Rossi said building approvals declined in Tasmania (-1.2 per cent), South Australia (-2.9 per cent), Western Australia (-4.7 per cent) and Queensland (-6.3 per cent).
BIS Oxford Economist Maree Kilroy said the ABS figures show houses in Australia’s largest two states had underpinned the national results.
“Buyer sentiment has been given a boost by back to back rate cuts, [we] anticipate another 25 basis point rate cut by the years end,” Kilroy said.
“However, given the long lead times involved between new property sales and actual construction, the positive impact of falling borrowing costs will not materialise in the building approval data until first quarter 2020.”