Monday, June 2, 2014

Building approval foundations slow to form

Building approvals from the ABS today have been regarded as disappointing, including here in FNQ: Building approvals pulled weaker by units; FNQ also weaker

House approvals in April slipped back to 40 in Cairns LGA. Cairns LGA numbers still include Douglas where there were 5. There was a small upward revision in the Conus Trend for Cairns LGA to 53. The 'value of non-residential building approvals' was also sharply lower in April after a couple of quite strong months and such volatility here should be expected. These numbers in residential housing remain about half of Townsville where the trend continues to weaken.

The lumpy units sector influential in approvals stats elsewhere remains stubbornly absent in Cairns although rumoured prospects of renewed activity continue to accumulate. A curious aspect of the most recent CairnsWatch was a divergence between house and unit rentals with the unit trend vacancy rate increasing to 3.0%. This doesn't seem consistent either with typical seasonal trends or the absence of any new supply in the sector.

The trend for approvals in Cairns to be skewed heavily to the north also remains strongly intact. Another feature of CairnsWatch reports has been an upward trend in vacant land prices, which shouldn't necessarily be seen as a positive. As median prices there is a suspicion here that the skewing of activity to the north could influence this trend with land valuations on the north typically higher than south.

These are the current median residential land valuations by suburb from the Valuer-General:

 
The Qld Government Statistician has also recently updated their residential land development activity profiles. The stock of approved lots here in Cairns has been slowly declining to 5,059 in the December quarter 2013, with a significant number of previous lot approvals continuing to lapse. This still looks to be an adequate supply of approved lots relative to demand.

Conus: Building approvals pulled weaker by units; FNQ also weaker
Macrobusiness: Dwelling approvals fall sharply again

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