Building approvals fall on apartment slide

Dwelling approvals have fallen 8.7 per cent, as a payback in the booming but volatile apartment sector offset a gain for more stable detached house construction.

The Bureau of Statistics figures for September show a 2.3 per cent rise in the number of approvals for new houses to 9,605, while apartment and town house approvals fell 16.3 per cent to 9,166.

Multi-unit approvals are now down almost 10 per cent on the same period last year in seasonally adjusted terms, but still up 7.1 per cent in more stable trend figures that remove some of the volatility.

Westpac economist Matthew Hassan said it was the high rise apartment sector that was the main factor.

"Within this segment the 'usual culprit' when there is volatility - high rise approvals – was down just over 20 per cent in the month, but down only slightly on a year ago, reflecting the high starting point following a big surge in July," he wrote in a note.

Beyond this volatile category - skewed by approvals for very large developments containing many individual apartments - Mr Hassan observed a slight slowdown in future residential construction.

"The combined picture from 'non-high rise' approvals now show a trend decline for six consecutive months tracking at a 10-15 per cent annual pace," he noted.

"The state detail shows this coming through across all the main states – a more convincing, though still tentative, sign of a broad underlying slowdown."

The value of residential dwelling approvals fell 4.4 per cent in September after having risen for two months, but the total value of building work approved jumped nearly 30 per cent in the month on a 119 per cent surge in the value of non-residential work.