Approvals rebound
Building approvals rose by 4 per cent to a seasonally adjusted 15,500 in October 2024, a solid gain to hit the highest level in 22 months.
The rebound was driven by a sizeable monthly jump in (mainly high-rise) unit approvals across Greater Sydney (to 2,146), and especially Greater Melbourne (to 2,870).
Over the year to October, however, total attached approvals remained at cripplingly low levels across Greater Sydney (14,590), Melbourne (17,900), and Brisbane (5,500).
Detached house approvals fell back by -5 per cent over the month to 9,190, seasonally adjusted, but there's been a solid uptrend underway in Greater Perth, Melbourne, Brisbane, and possibly now Adelaide.
Piecing it together there were 15,500 approvals, and the trend figures show that the cycle has clearly passed the nadir now.
Over the year total dwelling approvals increased to around 163,000, whereas they probably need to be running nearer to 240,000 to meet the high levels of demand.
Business indicators soft
In other news, the Q3 business indicators were relatively soft.
Mining profits were down to around $47.7 billion in the September 2024 quarter, well down from the highs of above $80 billion in the June 2024 quarter.
As such, corporate profits were -4.6 per cent lower over the quarter, as was to be expected, given that the trend in Aussie operating profits have always followed the ebbs and flows of the commodity cycle.
Inventories were run down over the quarter, dropping by -0.9 per cent, which will subtract a significant -0.5ppt from GDP growth in Q3.
The decline was partly due to the mining sector as expected, but also driven by retailers, hinting at weaker consumer demand and signs of potential discounting.
Retail turnover increased by a solid 0.6 per cent in October, seasonally adjusted, but the ABS reported that this was partly due to price discounting to bring in more shoppers.
Anecdotally, the shopping centres are packed to the rafters up here today (Noosa Civic) as shoppers prepare for Xmas, but there are plenty of pricing deals and discounts around for Black Friday too.
There are more partials to be released ahead of the Australian National Accounts on Wednesday, but it rather looks like a continuation of the longest per capita recession on record (6 quarters so far, and counting...).
House prices eke out a gain
In other news, housing prices increased for a 22nd consecutive month, but were only marginally higher in rising by 0.1 per cent in October, and 0.5 per cent over the quarter, as the market runs out of puff into the end of the calendar year.
Source: CoreLogic
The rental price boom appears to have ended, with rents rising by only 0.2 per cent over the month, and 5.3 per cent over the year.
This was the lowest monthly increase since all the way back in April 2021, and the ongoing trend represents further good news for the battle against inflation.
Tim Lawless of CoreLogic commented:
"A year ago, rents were increasing at the annual rate of 8.1% and by more than 9% over the prior two years.
“At 5.3% annual growth, rents are still rising at more than twice the pre-pandemic decade average of 2.0%, but given the weak monthly change the annual trend is set to slow further from here,” Mr Lawless said.
“It will be interesting to see if the rate of rental growth rebounds through the seasonally strong first quarter of the year in 2025, but beyond any seasonality, it looks increasingly like the rental boom is over.”
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