Real estate: Building approvals fall but auction clearances stay strong
Building approvals fell steeply in May on a drop in apartments, but auction clearance rates are holding strong in Sydney and Melbourne.
The Bureau of Statistics figures on permits granted for new dwellings showed a 5.2 per cent fall in May, seasonally adjusted.
That result was entirely driven by apartments and town houses, down 11.3 per cent, while detached houses were up a very modest 0.1 per cent.
However, in more stable trend terms which smooth out monthly volatility, apartments and town houses recorded a 1.6 per cent rise, the sixth month in a row such approvals had increased.
Economists at UBS said that, even though the seasonally adjusted fall in May was bigger than expected, dwelling approvals remain at boom levels.
"While residential building approvals fell in May, the level remains at a booming 231,000 [per annum], and the trend is also still relatively high," the bank's analysts wrote in a note.
Real estate market remains strong in Sydney, Melbourne
Likewise, auction clearance rates remain at strong levels, albeit with a much reduced number of sales due to the federal election on Saturday.
CoreLogic figures show 811 residential auctions taking place last week, compared to 2,218 the week before, with few vendors wanting to sell on polling day.
However, more than 70 per cent of the properties on the block were sold, with the clearance rate in Sydney topping 80 per cent and 71.6 per cent of Melbourne auctions resulting in a sale.
Weaker results of 50 per cent or lower in Canberra, Perth, Brisbane and Tasmania weighed on the national average.
Home price data for June released by CoreLogic last week showed that Sydney and Melbourne continued to lead property price increases across the nation.
Source: ABC News