The Australian housing sector saw residential building approvals increased by 6.4 pct m/m in August.
House approvals 1.7% lower and flat/unit/townhouse approvals 22.5% higher in the month. Total dwelling approvals decreased 15.4% in year-on-year terms.
"Falling interest rates have often been the trigger for cyclical recovery in home building. While we expect the cumulative impact of RBA rate cuts to provide a moderately positive boost to building approvals over the coming months, tightening developer profit margins, weak buyer sentiment, falling home prices and tight credit conditions will limit any potential rebound in dwelling construction in the near-term," says a note from ANZ Bank in the wake of the data release.
Dwelling approvals were higher in August in Victoria, Queensland and WA. T
he most significant monthly decrease was in New South Wales. In level terms, Victorian approvals continued to run higher than other states and territories – and have done so since April 2008, with trend dwelling approvals around 46% higher than the next highest state (New South Wales) in August.
Meanwhile, Australian retail sales rose 0.2% m/m in August, disappointing market expectations for an increase of +0.4%)
The impact of the data release on the Australian dollar was notable; the currency slipped by 0.21 pct against the pound and is unchanged against an under-performing US dollar.