Building approvals rise but the bubble may be about to burst
A modest increase in July creates eight-month-long streak.
The total number of dwelling approvals continued to rise in July, up 0.2%, on the back of eight straight months of gains, according to the latest data.
The increase in dwelling approvals led the value of approved new builds to rise 1.9% in July, resulting in seven consecutive months of value growth, the Australian Bureau of Statistics (ABS) reported.
Private sector house approvals fell 0.5% in July, while private sector dwellings excluding houses rose 0.9%.
The trend estimate for total number of dwellings approved in New South Wales rose 2.4% in July. It's been gaining steam for the last eight months. Dwelling approvals in Victoria increased modestly, up 0.5% in July, continuing 11 months of consecutive increases.
Queensland, South Australia and Western Australia all experienced a 1.8% decrease in the trend estimate for dwelling approvals in July.
The greatest monthly decreases were recorded in Tasmania (-3.7%), the Northern Territory (-3.2%) and the ACT (-2.6%).
Earlier this month, APRA revealed both the value of housing investment and owner-occupied loans among Australian financial institutions increased in June.
While these results are mostly positive, some analysts anticipate a reversing trend in coming years.
The Housing Industry Association’s (HIA) latest National Outlook has forecast three consecutive years of decline for new home building. The industry body says new dwelling commencements hit their peak in 2015/16.