New data shows that Australians are turning their backs on high-rise units and are turning their sights towards houses and low-level units, signifying a historic change.
The latest Property Pulse by CoreLogic takes a look at building approval data released by the Australian Bureau of Statistics, showing that there were 18,701 dwelling approvals in April, split between 10,618 houses and 8,083 units.
Overall, these figures are trending under their cyclical peak, 2.2 per cent under for houses and 31.9 per cent under for units, but the results are not so black and white when looked at in detail.
High-rise units and town house approvals saw a decline over the month, but low-rise unit approvals were up. Cameron Kusher, CoreLogic research analyst, said that this was particularly notable.
“Historically, the number of high-rise units and town house approvals has been fairly similar however; over recent years, high-rise units have well and truly dominated the landscape,” Mr Kusher said.
“With high-rise unit projects becoming harder to make stack-up and pre-sales more difficult as values fall, it’s expected that going forward there will be fewer high-rise approvals and potentially an uplift in medium-density approvals such as low-rise units and town houses.”
In the capital cities over the last six months, housing approvals are rising in Hobart and Canberra, holding steady in Melbourne and Darwin, and down in Sydney, Brisbane, Perth and Adelaide.
Meanwhile, unit approvals over the last six months are, on the whole, on the rise across all the capital cities, with units at historic highs in Melbourne; in other capitals such as Sydney, Brisbane, Adelaide and Canberra, the numbers are above the long-term average levels.
“After years of booming unit approvals and a more moderate lift in house approvals, the recent falls in unit approvals comes at a time in which house approvals are climbing,” Mr Kusher said.
“As the data has shown, the recent declines in unit approvals are being led by high-rise units approvals which have surged to record levels over recent years.”
The culprit behind this decline, according to Mr Kusher, is hypothesized to be difficulty obtaining finances.
“Difficulty with getting finance and the necessary pre-sales to proceed with large-scale projects is likely to mean that, moving forward, houses and lower-density unit projects are likely to be the preferred options for developers,” the analyst said.
“That’s not to say that high-rise projects still won’t occur, but they aren’t expected to be occurring at the magnitude seen over recent years.”