New home approvals fall sharply in July
The number of homes given the green light for construction in Australia fell sharply in July.
Approvals for the construction of new dwellings fell by 5.2 per cent from the previous month on seasonally adjusted terms, according to the Australian Bureau of Statistics.
Economists had expected approvals would fall by a more modest 2 per cent in July, after they climbed 6.4 per cent higher the month before.
But approvals for properties in the 'other dwellings' category, which includes apartment blocks and townhouses, dropped by 6.6 per cent in July, while private sector house approvals were down by 3.0 per cent.
Total approvals in the month were down 5.6 per cent from last July.
CommSec senior economist Ryan Felsman says the results show home investment is still weakening, but isn't heading into freefall.
"We continue to expect a soft landing as the housing market rebalances," he said in statement.
MP Capital chief economist Shane Oliver said it appears the construction cycle has peaked.
"Home building approvals remain high but momentum is weak."
Though approvals fell, the value of new buildings approved for building rose by 7.1 per cent.
The value of residential building fell 4.9 per cent, while the value of non residential building rose 31.5 per cent.
ANZ's head of Australian economics David Plank said a jump in offices getting the go-ahead for construction in NSW - and to a lesser extent Victoria - has driven up the value of non-residential approvals.
"It was sufficient to mean the value of non-residential approvals is no longer trending lower," he said.
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