BetaShares chief economist David Bassanese believes that despite market optimism, the August figures will show that Australia’s property boom is beginning to recede.
“The August number of housing finance approvals will be a key indicator of whether there is much life left in the housing upturn,” he said.
“Approvals appear to have peaked earlier this year but the market is counting on a feisty upturn in August after a flat outcome in July.
“BetaShares expects a below market two per cent decline, however, which will add to the case that the housing sector has peaked.”
ABS figures have also revealed that building approvals fell significantly in August following a rebound in July.
According to the ABS, 18,701 dwellings were approved for construction over August – down 6.9 per cent on the month prior.
Mortgage Choice chief executive officer John Flavell said the 6.9 per cent decrease could largely be attributed to a significant drop in the number of apartments that were approved for construction.
“Throughout the month of August, 8,760 private sector dwellings excluding houses were approved – down 11.4 per cent on the month prior,” he said.
“While this is a significant drop, it is not surprising when you consider that the apartment sector is incredibly volatile month-to-month due to the approval of large developments.”