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New data showed housing demand is still on the rise, reflected by the strong number of approvals for detached buildings and apartments in the latest quarter.
Recent figures from the Australian Bureau of Statistics (ABS) show that approvals for detached homes over the three months to September rose by 15.5 per cent from the same quarter in 2020 and by 32.2 per cent from the same period in 2019.
Citing the bureau’s data, Housing Industry Association (HIA) economist Tom Devitt said the strong growth in detached dwelling approvals will continue to underpin a healthy pipeline of on-the-ground home building work to the end of 2022.
He also noted that other leading indicators all point to the detached market’s strength despite lockdowns and the HomeBuilder scheme ending in March.
HIA’s New Home Sales data showed that sales in the three months to September 2021 – while not as strong as they were in the same period last year when HomeBuilder demand was at its peak – were still 7.4 per cent higher than in 2019.
“These sales will flow through to approvals data in the coming months and will continue to create employment opportunities into the second half of 2022,” Mr Devitt said.
Approvals for multi-units also saw an upward trend, surging by 34.4 per cent from the same period in 2020.
Mr Devitt commented that the improvement in apartment approvals over the last year was led by NSW and, to a lesser extent, Queensland and Western Australia.
The economist also highlighted the increased medium-density housing activity, indicating that the market is benefiting from the shift in preferences towards lower-density housing.
“Strong growth in detached house prices may also be adding to the popularity of medium-density living,” he added.
Mr Devitt noted that renovation approvals also remain elevated. Despite a slight decline in September, the value of renovation approvals is still up by 10.6 per cent in September 2020.
“In addition to HomeBuilder, this has been driven by shifts in spending from services like travel, entertainment and dining out, towards housing.
“With Australians spending more time at home and accumulating a significant amount of savings, an increase in demand for larger living spaces is unsurprising.”
The recent report also showed that in seasonally adjusted terms, total residential building approvals rose in the three months to September 2021 compared to the same time last year in almost all states and territories, except Tasmania.
NSW recorded the biggest increase with 38.5 per cent, followed by South Australia with 30.5 per cent, and Western Australia came in third place with 28.6 per cent.
Queensland’s total residential building approvals climbed by 22.7 per cent, while Victoria also noted a 9.7 per cent increase. Meanwhile, Tasmania saw a decline of 11.3 per cent.
In original terms, building approvals rose in the ACT by 9.3 per cent and declined in the Northern Territory by 31.7 per cent.
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