New home approvals in Australia reached 10 month high in November 2017

Approvals for new homes in Australia have increased to their highest level in 10 months, up 0.9% month on month and 11.7% year on year, official figures show.

The value of residential building overall rose 2.3% in November 2017, the figures from the Australian Bureau of Statistics (ABS) also show.

‘Dwelling approvals have continued to rise in recent months, which has been driven by renewed strength in approvals for apartments. Approvals for private sector houses have remained stable, with just under 10,000 houses approved in November 2017,’ said Justin Lokhorst, director of construction statistics at the ABS.

A breakdown of the figures show that approvals increased in November in Victoria by 5.6%, were up 3.1% in Tasmania and by 0.1% in South Australia. But approvals fell by 21.9% in the Australian Capital Territory, by 3.8% in the Northern Territory, by 1.2% in Queensland, by 0.9% in New South Wales and by 0.6% in Western Australia.

In trend terms, approvals for private sector houses fell 0.1% in November. Private sector house approvals fell in Western Australia by 3.3%, in New South Wales by 0.8% and by 0.4% in Queensland but rose in South Australia by 1.3%, and in Victoria by 1.1%.

In seasonally adjusted terms, dwelling approvals increased by 11.7% in November, driven by a rise in private dwellings excluding houses by 30.6% while private house approvals fell 2%.

The value of total building approvals rose 1.5% in November, in trend terms, and has risen for 11 months. The value of residential building rose 2.3% while non-residential building rose 0.2%.

Shane Garrett, Housing Industry Association senior economist, pointed out that the number of approvals remains consistent with what was seen throughout 2017. ‘Even though multi-unit approvals can vary hugely from month to month, the result for November is still remarkably robust given that building approval volumes have been trending down for some time,’ he said.

‘The geographic reach of November’s expansion was quite narrow with Melbourne’s booming market accounting for the lion’s share of the increase nationally. Victoria is easily the fastest growing state in terms of population and it is encouraging that new housing supply in the state is responding to the strongly growing demand,’ he explained.

‘Newly built dwellings are a vital component of the rental market and properly functioning rental markets are crucial in accommodating employment growth and economic development. It is very important that taxation settings relating to investors continue to support the provision of adequate rental supply,’ he added.