Clearing Houses

Housing data won’t influence the RBA – ShareCafe

Good news for the building industry on Monday with approvals for new housing up in May due to an increase in green lights for new apartments, housing units and townhouses, while housing finance stabilized in May after earlier weakness.

Both data points will have no impact on the Reserve Bank‘s thinking at today’s monetary policy meeting, where they are widely expected to raise rates by half a percent (although some economists think a 0.25% hike might be possible).

Both sets of numbers confirm that housing is weak (and house prices are weakening) but not in crisis. Vacancies are at record highs and the labor market is the tightest on record, while retail sales continue to grow strongly.

Data from the Australian Bureau of Statistics (ABS) showed that the total number of approved homes increased seasonally by 9.9% in May, after falling 3.9% in April.

Approved private sector houses fell 2.7%, while private sector housing excluding houses (apartments, etc.) rose 32.0%. The ABS said the value of non-residential buildings rose 16.5%.

May’s improvement couldn’t mask the industry’s sluggishness over the past year (and into 2022-23).

ABS data shows that in the year to May, the total number of approvals fell by 23.4%, private homes by 25.3% and non-private dwellings by 22% .

Daniel Rossi, director of construction statistics at ABS, said on Monday; “The increase in total housing approved in May was driven by private sector housing approvals excluding homes, which rose 32.0%.”

“Approvals for private sector homes fell 2.7% in May, following a 0.2% decline in April.”

Across Australia, housing approvals increased in Western Australia (38.7%), Tasmania (26.8%), Queensland (20.9%) and New Wales. South (4.7%), in seasonally adjusted terms. Housing approvals fell 21.3% in South Australia and 6.6% in Victoria.

Approvals for private sector homes fell 11.1% in New South Wales, 4.1% in South Australia, Queensland (down 1.3%) and Victoria (-0 .9%). There was a 4.9% increase in WA, seasonally.

The value of total construction approved rose 9.9% in May, following a 5.0% decline in April. The value of total residential construction increased by 5.6%, comprised of a 5.9% increase in the value of new approved residential buildings and a 3.8% increase in the value of alterations and renovations. additions (The trades are still doing well).

The value of non-residential buildings rose 16.5% after falling 16.8% in April. The improvement in this sector is as much due to the “bundling” of old approvals by local governments as to new investments.


Meanwhile, other ABS data showed a 1.7% increase (seasonally adjusted) in the value of new home loan commitments to $32.4 billion in May 2022.

Funding per homeowner rose 2.1% in the month to fall 9.7% on the year to May, while funding for home loans to investors rose 0.9% in May , but was still up almost 24% on the year.

That left the value of new home loans down 0.4% in the year to May, according to the ABS.

Katherine Keenan, Head of Finance and Wealth at ABS, said: “The rise in May followed a revised decline of 2.8% in April, when the proximity of the Easter and ANZAC bank holidays reduced the processing loan applications. Major lenders attributed the rise in May to clearing backlogs.

“The value of new home loan commitments from homeowners increased 2.1%, contributing 82% of the rise in total loans. Loan commitments to investors increased by 0.9%.

The value of new homeowner loan commitments increased in most states and territories, with the largest being Victoria (up 6.1%), Queensland (up 2.5%) and Australia. South Australia (up 2.8%). WA saw a drop of 3.3% and the Northern Territory a drop of 7.3%.

The number of new homeownership loan commitments increased by 2.3% in May 2022. The ABS said it was 31.6% lower compared to the same period last year last. The number of loan commitments fell in Western Australia (-2.4%), Queensland (-0.5%) and South Australia (-1.5%).