dwelling approvals fall in nov

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    From www.egoli.com.au

    Westpac: Australian dwelling approvals correct
    Tuesday, December 31, 2002.

    Australian dwelling approvals correct

    Nov. dwelling approvals: -25.6%mth vs mkt –15.5%mth
    Approvals of dwellings fell sharply in November, following the record high of October.

    Did the size of the fall represent something more than just a correction? Possibly, but not convincingly so is our take - with unit approvals still at high levels when averaged over October and November.

    Our view for 2003 remains that housing activity will moderate. This assumes that investor interest in housing will wane, a development yet to emerge, in response to deteriorating yields.

    Interestingly, non-residential approvals strengthened further in November. The resulting construction will partially offset the expected downturn in the residential sector in 2003.
    A downward trend in aggregate dwelling approvals has yet to emerge. Total approvals for the last two months averaged 15,500 – exceeding the average of the previous ‘boom’ six months of 15,000.

    It is no great surprise that the composition of approvals is diverging – consistent with lending finance data.

    Approvals for private sector houses over the last two months were 6.7% below the average of the previous six months. But for units, approvals were up by 24% over this period. Clearly, investors are yet to heed the cautions emitting from the RBA through 2002.

    Non-residential construction is in the midst of a strong upswing, fuelled by low interest rates. Such construction is about half the size of new dwelling investment.

    To view the complete report please click here.

    All opinions, statements, and forecasts expressed in this bulletin are based on information from sources which the bank believes to be authentic. Westpac Banking Corporation (ABN 33 007 457 141) issues no invitation to anyone to rely on this bulletin and it intends by this statement to exclude liability for any such opinions, statements and forecasts.

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