State by state
Western Australia reported the sharpest rise in approvals, up by 29 per cent month-on-month, with unit approvals up by 184 per cent while house approvals rose by 3 per cent.
NSW also reported a strong rise in dwelling approvals, which rose by 12 per cent month-on-month, led by an 18 per cent increase in unit approvals and a 7 per cent rise in detached housing approvals.
Conversely, the downward trend in approvals across Victoria continued with an 8 per cent fall in January, spurred by a 22 per cent decline in unit approvals and a 2 per cent drop in house approvals.
Total approvals also dropped in Queensland, falling for the seventh consecutive month by 4 per cent, with unit approvals declining by 8 per cent and house approvals falling by 2 per cent.
South Australia also reported a drop in total dwelling approvals, which fell by 2 per cent, driven by a 20 per cent decline in unit approvals, partly offset by a 4 per cent rise in house approvals.
The big picture
Overall, total building approvals rose by 2.5 per cent in January, following an 8.1 per cent drop in December 2018.
The uptick in residential dwelling approvals was driven by a 3.8 per cent increase in unit approvals (from an 18.7 per cent fall in December) and a 1.9 per cent increase in house approvals (from a 1.7 per cent decline).
“The overall trend in approvals remains soft, but it is slightly encouraging that the pace of declines at the end of 2018 hasn’t continued,” said ANZ Research in response to the new data.
ANZ Research also noted that the number of approvals remains well below average annual trends.
Why does this matter?
Supply has a direct influence on housing prices — restricted supply typically inflates prices, while over-supply has the opposite impact.
Capital city prices are softening nationwide, and in major cities like Sydney and Melbourne, new supply hitting the market this and last year is a key contributor to this.
You can read more about predictions for the 2019 property market here.