A November building approvals rebound has vastly outstripped expectations, with units and townhouses driving total dwelling approvals up by 11.8 per cent after a shockingly bad October.
Approvals for private sector houses jumped 6.1 per cent to 8,456 for the month on a seasonally adjusted basis, while the “other dwellings” category that includes apartment blocks and townhouses rose 22.6 per cent to 6,048.
There were 1,626 more dwelling approvals in November than October, when figures nosedived by an unexpectedly large 8.1 per cent.
Market consensus had been for total approvals to respond with a 2.0 per cent rise in November, though economists were wary of a volatile result around a weak trend.
NAB, for example, tipped a further decline in unit approvals would likely outstrip a slight increase in house approvals for the month.
Maree Kilroy from BIS Oxford Economics said the November result signalled the nation was approaching a floor in housing demand.
“The freeing up of credit, as seen in recent new loan growth, is starting to have a positive effect on new dwelling demand with the increased churn of established dwellings encouraging upgraders towards new construction,” Ms Kilroy said in a note.
On an annual basis, total building approvals are still down 3.8 per cent, the Australian Bureau of Statistics said on Wednesday.
This is driven by a 9.9 per cent annual decline in house approvals.
The approvals data comes after a construction industry indicator showed the building sector ended 2019 on a low note, with deteriorating activity, new orders and supplier deliveries pushing the December Performance of Construction Index to its lowest mark since May 2013.
Meanwhile, the seasonally adjusted estimate of the value of total buildings approved fell 6.5 per cent in November.
The value of residential buildings rose 5.2 per cent, while the value of non-residential buildings fell 20.7 per cent.