Tentative signs of a bottoming-out in Australian residential construction activity levels have emerged according to data released by the ABS today, albeit as a result of a big lift in activity from the volatile unit and apartment market sector.
The seasonally adjusted value of total building in Australia for February rose by 12.75% compared to the previous month, with the value of residential construction rising by 11.2%.
The number of new private housing approvals rose by 1.3% with approvals for apartments, units and flats rising by a significant 32% compared to the previous month.
Activity levels however still remain well down on the levels of the previous year with the value of total construction for 2009 63.5% below the level for the same period in 2008.
Dr. Andrew Wilson, Senior Economist at Rider Levett Bucknall commented, "The possible stabilization of residential construction activity levels reflected a substantial rise in new apartment and unit approvals. The level of growth of new house approvals remains subdued despite the number of stimulus initiatives directed at the sector. The bounce from the apartment sector comes from a very low base and a notoriously volatile data series."
In New South Wales, the number of new homes approved remains at historically low levels, with only 990 new homes approved for the month. Apartment and unit construction approvals however rose in February to 378 from the all-time recorded low of 132 approvals in January. This is still well down on the monthly unit and apartment approval levels recorded through 2008.
Non-residential activity continue to decline significantly with construction approvals well over 50% below the levels recorded a year ago. Both the commercial and industrial sectors are experiencing this decline although industrial approvals rose by 15% compared to the January data.
In Victoria, the level of decline in non-residential activity is similar to that being experienced by NSW. The value of non-residential building approvals for 2009 is 85% below the level for the same period in 2008.
Residential construction activity is however showing some signs of stabilization with the seasonally adjusted value of approvals for February 15% higher than January and 9% higher than February 2008. Victoria is still building significantly more new homes than NSW with 2480 approvals in February compared to 990. Unit and apartment approvals are also significantly higher than NSW with 683 February approvals compared to 378.
In Queensland, although the total value of building rose by over 19% in February compared to January (which recorded a very low figure), levels are still substantially below those recorded for the same period a year ago. For 2009, non-residential construction in Queensland is 112% below the level for the same period in 2008. There was however a big spike in the value of commercial building approvals recorded in February compared to January rising by over 200% in the month, however again a result of a very low figure in January.
Residential construction activity levels in Queensland continue to decline with the value of approvals from 2009 over 90% below the value for the same period in 2008. The number of new home approvals for February was nearly 2% below that recorded for January. Building approvals for new apartments and units have continued to decline significantly in Queensland with only 152 approvals for the month of February compared to Victoria with 683 approvals. This lowly figure was nearly half the number of unit and apartment approvals recorded for January.