Australia: Housing approvals trending up - ANZ

Australian housing approvals posted solid growth in September, providing further support to their view that the down turn in dwelling approvals is most likely behind us, according to David Plank, Head of Australian Economics at ANZ.

Key Quotes

“Housing approvals are now up a touch over 15% from their low in October 2016 and up more than 12% from the 2017 low (in March).” 

“To be fair this still leaves monthly approvals down close to 14% from the historic high in August 2016. If we look at the three months to September 2017 against the three months to the peak in August 2016 then dwelling approvals are around 10% lower. But the recent trend is clearly up, which means the downturn looks to be have been much shallower than previous downturns. We attribute this to continued low interest rates and strong population growth.”

“While we are on the subject of housing, we should comment on price developments and the news that Sydney house prices have fallen (again) in September. There was some reasonably ‘breathless’ analysis about what all this meant. We’ve been saying for some time that the combination of regulatory clampdowns, tighter requirements on foreign buyers (including constraints on capital outflows by Chinese authorities) and modestly higher interest rates for investors was likely to slow nationwide house price inflation to around 5-6% by the end of this year and close to zero by the end of next. We think the data are consistent with this outlook and we see nothing that suggests a more material price correction is underway.”