New home building approvals in Australia recorded their biggest monthly jump in a year in November, led by a massive rise in permits for apartments in Victoria.
Approvals climbed 11.7% in November from a year earlier, with apartment permits rising 30.6% nationally. Private home approvals fell slightly.
The increase in approvals was mainly due to a 37.9% jump in the southern state of Victoria, while other states remained soft, according to data from the Australian Bureau of Statistics.
Victoria is the fastest growing state for population in the country, so some of the rise in approvals in understandable, said economists.
Still, data in coming months is expected to be weaker reflecting a broader weakness in the housing market.
"This strong overall result is likely to unwind next month, as Victoria surely will not sustain such levels of activity," said David Gradwell, economist at ANZ Bank.
The strong November data reflects in part an ongoing shift in Australia toward apartment living, with more people wanting to be located closer to central business districts as opposed to often distant urban fringes.
Still, the outlook for housing remains soft as tightened regulation around mortgage lending continues to damp housing investor demand, while the next move in interest rates is likely to be up, albeit not until 2019.
Already there are signs that housing demand is cooling, with house prices now falling in major markets like Sydney, snapping years of strong price growth.
"An apparent cooling in housing market conditions in major cities like Sydney, are reasons to be cautious," James Glenn, economist at National Australia Bank said.
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(END) Dow Jones Newswires
January 08, 2018 23:58 ET (04:58 GMT)