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Main Indicator: Building Approvals
Most Recent Release
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Actual | Forecast | Previous | Revised Form | |
| -3.7% | -1.0% | -2.3% | N/A | ||
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For August m/m (s.a.)
Building Approvals y/y: -8.6%, forecast -4.5%, pr. -3.7% (Jul), -7.8% (Jun),
Australian building approvals were down 3.7% in August compared to July and registered an 8.6% drop compared to a year ago. Both of those numbers showed bigger falls than was expected by economists. The weaker figures reflect continued investor caution due to high interest rates and low residential yields. That should remain true as long as the financial turmoil remains. Traders are pricing in a 50 point basis cut when the RBA meets next Tuesday. |
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Table of Past Data
| 1/7 | 2/4 | 3/5 | 4/6 | 4/30 | 6/2 | 7/1 | 7/29 | 9/1 | 9/29 | ||
| Actual | 8.9% | -16.0% | 1.9% | 0.1% | -5.7% | 7.8% | -6.5% | -0.7% | -2.3% | -3.7% | |
| Forecast | 0.0% | -3.8% | 5.5% | 0.0% | -0.4% | -0.9% | -3.3% | 1.0% | 0.3% | -1.0% | |
| Previous | -3.6% | 8.9% | -16.0% | 1.9% | -0.8% | -5.5% | 5.4% | -7.2% | 2.2% | -2.3% | |
| Revised From | -2.8% | N/A | N/A | N/A | 0.1% | -5.7% | 7.8% | -6.5% | -0.7% | N/A | |
Secondary Indicator: Home Loans m/m
Most Recent Release
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Actual | Forecast | Previous | Revised Form | |
| -2.2% | -1.0% | -0.2% | N/A | ||
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For August
The number of home loans approved in Australia fell by 2.2% to 48,903 in August - a seven year low. The number of approvals is down 27% since January, when it reached 67,126. Demand for home loans is down as the economy heads lower, there is an increase in unemployment in sectors not associated with exports, and interest rates were still high. Weak demand supports the decision by the Reserve Bank of Australia to cut rates by a full 1% in Monday's meeting, as the bank tries to ease borrowing costs during the most recent and most severe bout of credit crisis. The rate reduction caused Australia's four largest banks to cut their standard variable home loan rates by 80 basis points. The RBA followed up its bold interest rate cut by expanding its market operations by allowing banks and other financial institutions to deposit residential mortgage-backed securities and asset-backed commercial paper in exchange for collateral. This move should try and help unfreeze credit markets in the country. Credit provided by banks and financial institutions rose a meager 0.4% in August, the smallest increase in 22 years. |
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Table of Past Data
| 1/15 | 2/10 | 3/10 | 4/13 | 5/11 | 6/9 | 7/8 | 8/5 | 9/8 | 10/7 | ||
| Actual | 4.0% | 0.1% | 2.3% | -5.9% | -6.1% | -3.0% | -7.9% | -3.7% | -0.2% | -2.2% | |
| Forecast | 0.9% | -0.9% | 0.9% | 0.5% | -0.8% | -2.0% | -2.0% | -2.1% | 0.0% | -1.0% | |
| Previous | -0.7% | 4.0% | 1.1% | 2.3% | -6.8% | -5.7% | -4.2% | -6.9% | -3.7% | -0.2% | |
| Revised From | N/A | N/A | N/A | N/A | -5.9% | -6.1% | -3.0 | -7.9 | N/A | N/A | |
Past Releases
Home Loans m/m
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Actual | Forecast | Previous | Revised Form | |
| -0.2% | 0.0% | -3.7% | N/A | ||
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For July
Approvals for home loans declined 0.2% in July, slightly below the forecast of flat growth. In June approvals declined by a much larger 3.7%, though today's negative result is the now the 6th straight month that approvals have dropped. The central bank lowered rates to 7.00% from 7.25%, in a move to make monetary policy less restrictive. It was the first time the RBA has lowered rates in nearly 7 years. With the economy cooling as domestic demand decreases, the bank expects inflation to moderate. Governor Glenn Stevens signaled that the RBA was going to lower rates, in its statement following the August 5th meeting. Since then the AUD/USD slid from 0.9150 to 0.8075, a move of 1000 pips. Only a couple of weeks earlier, on July 15th, the AUD/USD hit a 24-year high near 0.9847. The slide from that high is even more dramatic, amounting to almost 1750 pips in about two months time. |
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Actual | Forecast | Previous | Revised Form | |
| -2.3% | 0.3% | 2.2% | -0.7% | ||
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For July m/m (s.a.)
Building Approvals y/y: -3.7%, forecast -6.4%, pr. -7.8% (Jun), -0.4% (May),
Building permits declined after June's data was revised up. This continues a trend of decline that is due to toughened lendng standards and higher market interest rates. The RBA's rate cuts in part is due to a struggling housing market. The problems are not as deep as that of the US and UK. The difference though in Austraia is that there is no excessive inventory. In fact the growing poulation calls for more construction and home loans. |
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Actual | Forecast | Previous | Revised Form | |
| -3.7% | -2.1% | -6.9% | -7.9 | ||
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For June
Home Loans y/y pr. -3.6% The number of home-loan approvals fell to a four-year low in June, declining 3.7% from May. It seems that the Australian housing sector is catching the same bug already afflicting the US and the UK. Banks are cutting back on lending in 2008, and consumers, racked by high borrowing costs are unable to get financing that meets their terms. Prices have started backtracking. On Sunday, the quarterly house price index showed a 0.3% decline, the first in nearly 3 years. With the economy entering a period of moderation in growth, housing activity will only be pressured further. A weaker housing market will work the other way as well, as consumers already under siege from higher energy and food costs may cut back spending in the face of withering prospects for selling their homes. The Reserve Bank of Australia has already signaled that it will move to lower rates, which is pressuring the Aussie as it continues its slide vs the US Dollar. In the last 10 sessions the pair has declined from 0.9800 to 0.9100. |
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Actual | Forecast | Previous | Revised Form | |
| -0.7% | 1.0% | -7.2% | -6.5% | ||
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For June m/m (s.a.)
Building Approvals y/y: -7.8%, forecast -4.1%, pr. -0.4% r (May), 5.2% (Apr) |
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Actual | Forecast | Previous | Revised Form | |
| -7.9% | -2.0% | -4.2% | -3.0 | ||
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For May
Home loans had the biggest drop in 8 years, to 52,006 in May. This is below the trend estimate of 54,738. Construction declined by 5.0%, purchases of new dwellings fell -13.5%, and purchases of established dwellings dropped 8.0%. High borrowing costs are putting a damper on the housing market which has been pressured since the beginning of the year. From the release The number of owner occupied housing commitments (seasonally adjusted) decreased 7.9% (down 4,478) in May 2008 compared with April 2008, following a revised decrease of 4.2% in April 2008. Decreases were recorded in the purchase of established dwellings excluding refinancing (down 2,174, 7.0%), refinancing of established dwellings (down 1,812, 9.6%), purchase of new dwellings (down 261, 13.5%) and construction of dwellings (down 231, 5.0%). The trend estimates for the total number of owner occupied housing commitments decreased 4.2% in May 2008. |
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Actual | Forecast | Previous | Revised Form | |
| -6.5% | -3.3% | 5.4% | 7.8% | ||
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For May m/m (s.a.)
Building Approvals y/y: 0.2%, forecast 7.2%, pr. 5.2% (Apr), 0.7% (Mar) Australia's home approvals declined 6.5% on the month and are up 0.2% on the year. Approvals have been down 4 of the first five months of the year, as high interest rates put a clamp on investment projects such as homes. A bout of inflation has kept the Bank on the offensive this year, despite signs the economy may be softening. A slowdown in demand may help alleviate some of the price pressures the economy has seen recently. Lending to consumers and businesses by banks and other financial institutions has slowed this year. |
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Actual | Forecast | Previous | Revised Form | |
| -3.0% | -2.0% | -5.7% | -6.1% | ||
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For April
Australian home-loan approvals fell for a third straight month, with homebuyers becoming more cautious about their purchases with interest rates at a 12-year high, and the conomic situation looking less uncertain. The 3% decline was a bigger drop thatn economists had forecast. The AUstralian economy has been seeing a slowdown in dmeand, but not in inflation, and the Reserve Bank of Australia Governor signaled that interst rates may go up if demand rebounds continuing to stoke inflation.
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Actual | Forecast | Previous | Revised Form | |
| 7.8% | -0.9% | -5.5% | -5.7% | ||
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For April m/m (s.a.)
Building Approvals y/y: 5.2%, forecast -3.3%, pr. 0.7% Building approvals saw a large jump for April, surprising forecasts on the upside. March's approvals were a revised -5.5%. It was the first increase in 5 months, as demand for housing picked up. The news adds some positive news to the Australian economy which seemed to be heading for a slowdown according to recent data such as retail sales and manufacturing. The increase in approvals means the market for housing has some interest, and that the economy may be performing well despite 12-year high interest rates of 7.25%. |
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Actual | Forecast | Previous | Revised Form | |
| -6.1% | -0.8% | -6.8% | -5.9% | ||
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For March
Permits for owner occupied housing fell 6.1% in March after a upwardly revised 6.8% drop in February. The seasonally adjusted total of 59,371 permits from February to March values 14,224 billion AUD, a 4.4% decline from the previous month. The RBA acknowledges a moderation in housing as well as the general economy. So far, although signs point to declining demand and worsening consumer and business confidence, a resilient workforce should keep the Australian economy in decent shape to weather the ongoing global slowdown. The Aussie traded lower following the news, but rebounded overnight. |
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Actual | Forecast | Previous | Revised Form | |
| -5.7% | -0.4% | -0.8% | 0.1% | ||
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For March m/m (s.a.)
Building Approvals y/y: -0.7%, pr. -1.6% (Feb), 5.1% (Jan)
From the release:
Total Dwelling Units: |
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Actual | Forecast | Previous | Revised Form | |
| -5.9% | 0.5% | 2.3% | N/A | ||
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For February
The number of loans granted to people to build or buy homes or apartments dropped a seasonally adjusted 5.9% in February to 63,817 commitments (carrying a total value of A$14.95 billion). In January, permits totaled 67,794 valued at A$15.90 billion. The drop was the largest in four years, and undershot expectations of slightly positive growth of 0.5%. The report also showed that the total value of housing finance fell 7.1 per cent in February to $21.5 billion. The implications is that the economy may be cooling as four interest-rate increases in seven months work their way through the economy. Interest rates, at 7.25%, are at a 12-year high. Growth in the economy is slowing and the central bank will lower its forecasts for economic growth and inflation when its quarterly policy statement is released on May 9 the central bank governor Stevens said at a half-year testimony to parliament's economics committee in Sydney. |
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Actual | Forecast | Previous | Revised Form | |
| 0.1% | 0.0% | 1.9% | N/A | ||
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For February m/m (s.a.)
Building Approvals y/y: -1.6%, pr. 5.1% (Jan), -0.9% (Dec) Pre-Release: Last month's building approvals recovered to show growth of 1.9% m/m, after permits fell by 16% in January. The pick up was encouraging, but Australia is currently facing higher interest rates, and what appears to be some effects of the global slowdown. Post-Release: Australia's housing sector is still slow, but stabilizing somewhat from a few volatile months toward the end of last year. |
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Actual | Forecast | Previous | Revised Form | |
| 2.3% | 0.9% | 1.1% | N/A | ||
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For January
Release from Australian Bureau of Statistics (ABS) Total home loans increased for the 3rd month in a row in January. At the moment, it appears the housing market down under is steering clear from any problems that might be connected with the US housing crisis. |
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Actual | Forecast | Previous | Revised Form | |
| 1.9% | 5.5% | -16.0% | N/A | ||
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Seasonally adjusted month-over-month for January
Building Approvals y/y: 5.1% pr. -0.9%
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Actual | Forecast | Previous | Revised Form | |
| 0.1% | -0.9% | 4.0% | N/A | ||
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For December.
Release from Australian Bureau of Statistics (ABS) |
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Actual | Forecast | Previous | Revised Form | |
| -16.0% | -3.8% | 8.9% | N/A | ||
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For December (s.a.)
Approvals y/y: -0.9% Building approvals took a dive in December, with 12,263 units approved on a seasonally adjusted bases. |
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Actual | Forecast | Previous | Revised Form | |
| 4.0% | 0.9% | -0.7% | N/A | ||
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For November Release fromAustralian Bureau of Statistics (ABS) Refinancing was a key driver for the 4.0% surge in loans for "owner occupied housing". Excluding refinancing, first-time home loans rose 1.5%. |
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Actual | Forecast | Previous | Revised Form | |
| 8.9% | 0.0% | -3.6% | -2.8% | ||
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Seasonally adjusted month-over-month for November. Building Approvals y/y: 14.6%, pr. 9.1% Release from Australian Bureau of Statistics (ABS) Approvals for dwelling units surged 8.9% in November for the most increase in nine months. According to Bloomberg, improvements in employment, wages and immigration stimulated investment. Apartment building approvals drove up the increase. We know now that for December however, apartment construction contracted. |
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