Units take annual building approvals slump to new lows

Approvals in a mess

First the brighter news.

Detached house approvals are quite solid in Melbourne, and are trending higher in Perth.

Brisbane looks to have moved past the cycle lows here as well.

Attached dwelling approvals are in a quagmire, though, with appetite to build at extremely low levels.

Sydney (749), Melbourne (719), Brisbane (510), and Perth (239) all saw very low approvals in June.

For a mature and geographically constrained city like Sydney, which relies on new units to drive dwelling supply, these are cataclysmically bad.

Multi-unit approvals are now at the lowest level since 2009/10.

Overall, the trend for houses appears to be off the lows, but unit approvals remain extremely low in the capital cities, despite a few regional pockets of strength on the coast.

June is normally a quieter time of year, but tallying it all up, annual approvals fell to below 163,000, for a new cycle low and the lowest total since March 2013.

As Cameron Kusher of REA Group starkly pointed out, approvals haven't been this low since interest rates were this high.

All eyes turn to tomorrow's inflation data.

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In other news, Fortescue Metals saw its share price plunge 10 per cent today, as the outlook for iron ore has soured sentiment, which Rex Airlines has followed Bonza into trouble, with ticket sales now suspended.

A formal announcement is due tomorrow, with 2,000 jobs on the line and an apparent risk of the business going into administration. 

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James Foster ran through the detailed approvals figures here.

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