Nothing in the July building approvals will dissuade the Reserve Bank from cutting interest rates. If anything the latest figures from the Australian Bureau of Statistics emphasise the patchy nature of activity.

But the trend is still down, although figures from the Reserve Bank are starting to show a bottoming out in the slowdown in growth of housing credit. The RBA would have had these figures for its board meeting this morning.

After declining 0.7% in the first figures in July, the ABS said today that total dwelling approvals rose a revised 2.2% in that month, which was a surprise and went contrary to the way housing credit had been going.

So after that substantial revision, the ABS’s estimate of a 2.3% fall in July might not be as definite an indication of the slowdown as it looks.

However, the decline was very much worse than estimates from the market for a rise of 0.5%.

The ABS said 12,620 approvals were issued in July and total approvals were 3.7% down on July 2007.

Approvals to build private houses fell 3.4% to 8,366 in July (June was revised to a fall of 0.1% in June from the previous reading of steady) while approvals for “other dwellings” (the more volatile) such apartments and renovations fell 2.3%.

The ABS said the seasonally adjusted estimate for the value of total building approved rose 4.9% in July; the seasonally adjusted estimate for the value of new residential building approved fell 1.7% in July.

“The seasonally adjusted estimate for the value of alterations and additions rose 5.9%, and the value of non-residential building rose 12.1%.”

The news saw the dollar steady around the 85 US cents mark after touching a year low of 84.69 in trading earlier in the morning.

Peter Fray

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