Slump in building approval eases

The decline in building approvals moderated in September, down by only 0.8% in trend terms, according to the latest figures from the Australian Bureau of Statistics (ABS).

While the housing market clocked its 22nd consecutive month of decline in dwelling approvals, the recent slump in overall figures was the smallest in the past six months, said Daniel Rossi, director of construction statistics at the ABS.

"However, the number of dwellings approved remains 21.1% lower than at the same time last year," he said.

The table below shows the dwelling approvals in each state:

Short-lived lift?

The seasonally adjusted estimate for the total dwellings approved rose 7.6% in September, driven by a 16.6% increase in private dwellings excluding houses. Meanwhile, private-sector approvals rose 2.8%.

In line with this, the value of total buildings approved went up by 1.4% in trend terms, and has risen for the past nine months. The value of residential building inched up by 0.5%, while non-residential building rose 2.5%.

The apparent lift in dwelling approvals is expected to be short-lived as the overall market downtrend remains, said BIX Oxford Economics principal economist Tim Hibbert.

While rate cuts and the loosened mortgage serviceability guidelines have opened up access to credit, these drivers will only help the established residential market regain its footing over the next few months.

"It is not until June quarter next year that these measures are expected to drive sustained growth in dwelling approvals," Hibbert said.