Building approvals rebounded in October but the indicator is likely to moderate further in the coming months. Nevertheless, residential construction should head higher, supporting GDP growth, over the next 12 to 18 months.
Building approvals rose by 11.4 per cent in October, beating market expectations, to be 2.5 per cent higher over the year. At first glance that seems like a pretty good result but it largely offsets last month's 11 per cent decline. Furthermore, the pick-up was narrowly based -- concentrated in Victorian apartments -- which suggest that approvals will ease again over the next few months.