New home approvals strengthened in Australia in September but now expected to fall
The volume of new home approvals in Australia strengthened again during September but is expected to trend downwards over the next two years, the latest analysis suggests. Figures from the Australian Bureau of Statistics (ABS) show that overall, new dwelling approvals increased by 1.5% with detached home approvals up 0.8% and apartment approvals up by 2.3%. Meanwhile, quarter on quarter new home approvals were up by 5.1%, driven by a 7.6% increase in multi-unit approvals.
According to Shane Garrett, Housing Industry Association (HIA) senior economist, the outlook has been favourable in recent months. ‘Activity on the apartment side of the market has come under considerable pressure due to a number of obstacles being put in the way of foreign investors in residential property,’ he said.
He also said that home building is receiving some support from the strong pace of job creation in several key markets but he added; ‘In balance new home building activity will trend downwards over the next couple of years, probably bottoming out in 2019’.
The ABS figures also show that the value of total building approvals rose 1.3% in September, in trend terms, and has risen now for nine months. The value of residential building rose 1.5% while non-residential building rose 1%.
Bill Becker, assistant director of construction statistics at the ABS, said that the strength in non-residential building has been driven by approvals in Victoria, where a number of office and education buildings have been approved in recent months.
A breakdown of the figures show that new home approvals increased most month on month in Western Australia with a rise of 27.1%, followed by Tasmania up 16.5% and New South Wales up 10.7%. They also grew in the ACT with growth of 8%, in the Northern Territory by 6.9% and in South Australia by 6.6%.
Just two states experienced a decline in new home approvals during September with Queensland seeing numbers fall by 17% and Victoria by 2%.