Australian dwelling approvals decline in August amid apartment market volatility

The total number of dwelling approvals in Australia fell by 6.1% in August, reaching 13,991, following an 11% increase in July, according to seasonally adjusted data by the Australian Bureau of Statistics.

Daniel Rossi, head of construction statistics at ABS, noted that the decline was largely driven by a 16.5% drop in approvals for private dwellings excluding houses.

"The fluctuation reflects ongoing volatility in the apartment market, which remains subdued. The movements in dwellings excluding houses continue to be the result of volatility in apartment approvals," Rossi said.

Conversely, private sector house approvals showed a modest increase of 0.5%, totalling 9,338 dwellings, which is an 8.4% rise compared to August 2023.

New South Wales led the states with a notable increase of 3.9% in private house approvals.

Meanwhile, Western Australia recorded its highest number of private house approvals since June 2021.

In contrast, approvals for private sector dwellings excluding houses experienced a sharp decline of 16.5%, dropping to 4,418 dwellings, which is down 6.1% year-on-year.

The decrease was primarily attributed to a significant drop in high-density apartment approvals, with only 1,214 apartments in nine or more storey blocks approved in August, compared to 2,504 in July.

The value of total building approvals also experienced a slight decrease of 0.2% falling to $13.25 billion after a 6.9% rise in July.

Total residential building value dropped by 6.7% to $7.96 billion, largely due to a 7.9% decline in the value of new residential building approvals, which totalled $6.81 billion.

In contrast, alterations and additions increased by 1.4%, reaching $1.14 billion in seasonally adjusted terms.

The value of approved non-residential building saw an increase of 11.5%, totalling $5.30 billion after a 2.8% rise in July.