Australia: Another soft month for dwelling approvals - Westpac

Matthew Hassan, research analyst at Westpac, points out that the Australian dwelling approvals declined 1.5% in October, in line with the consensus forecast but with both the headline and detail a touch better than the Westpac’s expectations.

Key Quotes

“Approvals remain locked in a clear downtrend but this month's update eases some of the downside risks that had been emerging around non high rise approvals in particular.”

“Going into the October update we were expecting headline approvals to reconnect with this clear downtrend. Instead the decline is somewhat milder and detail mixed rather than weak.”

“All states recorded declines in October, Vic showing less of a pull back than might have been expected (–2.6%mth, –13.7%yr) given last month's high rise spike; and SA notably weaker (–17%mth, –24.8%yr). Across the other majors: NSW approvals were down –0.5%mth, –16.5%yr; Qld –1.1%mth, –13.3%yr; and WA –0.1%mth, –23.1%yr.”

“Overall, the October approvals report is weak but not quite as weak as we had feared. While the detail eases some of the downside risks to the outlook our view remains that residential building will see a significant 5% decline in 2019.”