Building approvals for WA appeared to be a mixed bag with total approvals up 1.3 per cent in August but approvals for the private sector down, new figures show.
Building approvals for WA appeared to be a mixed bag with total approvals up 1.3 per cent in August but approvals for the private sector down, new figures show.
The Australian Bureau of Statistics said today total building approvals in WA climbed to a seasonally adjusted 1,804 units, up from July's 1,780.
For the year to August, building approvals have jumped 27 per cent.
However, approvals for houses were down 3.4 per cent in August on the previous month to 1,586, while approvals for buildings built by the private sector were down from 1,720 to 1,645.
Nationally, the number of building approvals fell for the first time in three months in August, following healthy rises over the previous two months, but economists say there is no cause for alarm.
Australian building approvals fell 0.1 per cent to 12,126 units in August, seasonally adjusted.
The August result was the first monthly decline since May and worse than market expectations of a 2.5 per cent increase.
In the year to August, building approvals were flat.
J.P. Morgan chief economist Stephen Walters said the figures were "no disaster".
"They were a little bit softer than expectations, but all of it was to do with the high-density dwellings," Mr Walters said.
"In terms of the broader housing market, the single dwellings, they were pretty good."
The weak August report was due to a sharp decline in the "private sector other dwellings" category, which backpedalled 11.7 per cent in the month.
The category includes apartments and other multi-unit dwellings, had risen by 34.5 per cent and 28.9 per cent, respectively, over the previous two months and was regarded as a volatile sector.
Private sector dwelling approvals rose 3.1 per cent in August, having posted monthly rises through 2009.
Mr Walters said he expected some softness in building approvals after the federal government's temporary boost to the first home owner grant was pared back, but it would be a "gradual slowing".
"The expanded grant is still there, even in scale-back form, for another three months," Mr Walters said.
Since October last year, eligible first home buyers have received $14,000 for buying an existing home or $21,000 for buying a new home or building their own home.
The grant will be reduced to $10,500 and $14,000 respectively, between October 1 and December 31.
Mr Walters said there was still a "big incentive" for potential first home buyers to enter the market now.
"Prices will fall after the grant gets scaled back in January, but at the moment there is still a pretty big incentive with interest rates pretty low and that's what first home buyers are doing," Mr Walters said.
NAB economist David de Garis said that, despite being below market expectations, the trend in dwelling approvals was rising.
"So far this quarter, dwelling approvals are 9.5 per cent higher than average approvals in the June quarter," Mr de Garis said in a research note.
"Also contributing to this rise is a clear up-trend now evident in public housing approvals, courtesy of the lift in funds being devoted to public housing.
"It's modest in terms of the overall levels (new approvals for public housing constitutes around five per cent of total approvals) but contributing nevertheless."
Citigroup global markets economist Joshua Williamson said the fall in building approvals was entirely the result of the volatile apartments sector.
"The weak result was entirely in apartments, which fell 11 per cent after rising by over 50 per cent in the previous two months.
"The more stable approvals of detached houses rose 3.1 per cent and have risen every month this year.
"We continue to expect a moderate housing recovery with starts rising by around 20 per cent to around 155 thousand before peaking in 2011," he said.
