Australian Building Approvals Fall in May

The Australian building approvals plunged in May, ending three months of consecutive gains.

The number of people applying for building permits declined 5.2 percent in May from a gain of 3.3 percent recorded in the preceding month, Australian Bureau of Statistics reported on Monday.

The drop signals a possible slowdown in the booming residential building as apartments and town houses were reportedly down 11.3 percent in the said month, while detached houses rose 0.1 percent.

But on a 6 month average, apartments and town houses surged 1.6 percent. Which leaves the residential building approvals at a booming level of 231,000 year-on-year.

“It is important that the banks and investors recognize that this decline has been associated with an increase in the resilience and do not seek to offset it by decreasing the overall level of risk controls and culture, the latter in particular, can have both financial and reputational ramifications,” the Reserve Bank of Australia said in its biannual health check of the financial services industry.