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Further decline in housing approvals

Near-to-medium activity in housing construction will be subdued according to Moody's. It highlights the Australian Bureau of Statistics' recently released data showing a 3.4 per cent fall in approvals for new dwellings - the seventh consecutive monthly decline.

Moody's points to Australia's two-speed economy impacting the slowdown in dwellings approvals, with the resource sector experiencing rapid output growth while the non-resource sectors languish.

Moody's says expectations of further RBA rate rises, housing affordability that rates among the lowest in the world and tight lending to small- and medium-sized developers are adding to constraint in the housing sector.

However, Moody's notes the tepid long-term performance of Australia's housing activity is in stark contrast to the US, where the housing market remains at a 15-year low.

Source: Switzer Broker