Why housing won't help the economy's rebalancing act

Despite a decline in building approvals, residential investment is set to improve over the next couple of years, but it remains unlikely to aid the economy's transition away from its reliance on mining investment.

Building approvals continue to decline but residential investment should provide some support to the broader economy over the next few years. Nevertheless, residential investment remains only a small share of real GDP and cannot be expected to the do the heavy lifting as our economy rebalances.

Building approvals fell by 5.0 per cent in June, missing market expectations, to be 16.0 per cent higher over the year. This partially offset by strong growth last month and reflects a continuation of the downward trend over the past six months.

Graph for Why housing won't help the economy's rebalancing act

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