Sunday, July 6, 2014

A perspective on building approvals

The Cairns Post headline:


This came with a slightly more measured report from Grace Uhr in the Weekend edition: Building approvals up 35pc for Far North Queensland. Which was based on the PR release from the Master Builders: Unit approvals drive building approvals spike. The units spike here related to national and state data with the first unit approvals in two years still on the agenda for Cairns City!

The 35% is based on a yearly moving average comparison with the previous period to May 2013 and flatters the performance of Cairns if anything.  The Conus analysis from Pete Faulkner: Building Approvals data hiding weakness
Unfortunately here in the Far North things are also looking a little weaker. In Cairns unadjusted data showed 53 approvals (up from 40 in Apr) but the Conus Trend series remained unchanged at 46 (following a sharp downward revision to previous months). The Trend rate now sits 2.1% below its level a year ago.
I have previously alluded that building approvals in Cairns actually remain relatively weak despite some recovery from an extremely low base so how do we compare with other regions?  This is approvals in the more significant Local Government Areas as a proportion of population for houses, units, and total dwellings for the 11 months to May 2014 from the most recent ABS data:




I tried to format the unit approvals for Cairns in a different colour on that graph but the data point was too small to grab in my excel chart. The data does not yet de-amalgamate Douglas where the 4 units approved was the sum total for CRC.

Despite the hyperbole on the recovery to date, and the potentially positive outlook, building approvals over the past year have been a disappointment and certainly fallen short of my expectations and really gone nowhere at all in that time.

However an interesting point this month was that for the first time in yonks approvals on the southside surpassed the north of Cairns.



RP Research Blog: May 2014 dwelling approvals

2 comments:

  1. Very interesting perspective on the data Mark. I looked at my Trend series for the 11 months to May and this shows a 22% increase over the same period last year for Cairns...not at all bad but not quite the 35% being touted by the Master Builders (which is based on the unadjusted data). As you say, this increase is coming from a very low base.
    I think that my comments last week, yours above and Rick Carr's in his recent Cairns Watch ("Building approvals so far this year have been basically flat..") are much closer to the mark than the industry, and Cairns Post, hyperbole.

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  2. I note Gene's post today on Brisbane sort of related. Cairns has a relatively high proportion of unit dwellings relative to other regional centres so it could be argued that house approvals are not too far off the pace? Although rental vacancies remain lower for houses. Who knows what will happen with the first approval of a multi-story building. Coming off a zero base how will the Dalton calculator cope?

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