Building Approvals Slide, National House Values Rise

This compares to an downwardly revised 11,688 units in January, seasonally adjusted.

 

The Australian Bureau of Statistics said in the year to February, building approvals were down 15.2 per cent.

 

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Economists' forecasts had centred on a 0.5 per cent rise in approvals in February.

 

The downbeat data follows a report this morning which showed national home prices rose for the second consecutive month in March, buoyed by strength in the Sydney market.

 

RP Data-Rismark capital city home values increased 0.2 per cent nationally in March, following a 0.8 per cent rise in February.

 

In Sydney, prices advanced 0.4 per cent in March,  while home prices fell 0.2 per cent in Melbourne.

 

Despite recording a 0.3 per cent drop in dwelling values over the month, Canberra remains the most resilient market in the country, with a year on year drop of just 0.3 per cent in housing values, compared to the other capitals who have all experienced declines over 3 per cent in dwelling value.

 

The ACT continues to show strong returns on rental yields, at 4.8 per cent for houses and 5.7 per cent for units, while media dwelling price is the highest in the country at $529,975, with Sydney the second highest at $525,000 and all other capitals below $500,000.

 

Also today, the TD Securities – Melbourne Institute monthly inflation gauge rose 1.8 per cent in the year to March, slowing from the 2 per cent pace in the year to February. That's the lowest reading since October 2009.

 

Softer inflation figures in the year to March may give the Reserve Bank more room to cut interest rates soon.

 

ANZ real estate economist David Cannington said the building approvals numbers reflected how weak developer sentiment was.

 

Mr Cannington said both softer home prices and a bearish outlook for the sector were restraining growth.

 

"The worst of the house price falls are likely behind us, so that's good to see," he said, referring to the 0.2 per cent rise in home values in March, according to RP Data.

 

"But there's still an underlying weight of sentiment on the housing market," he said.