Home building in Australia reaches new record high
Home building approvals in Australia soared to a new record high in January 2015, up 5% on the previous monthly record of November 2014, the latest data shows.
The figures from the Australian Bureau of Statistics also shows that the total number of new homes approved in January 2015 was 7.9% higher than in December 2014.
Detached house approvals held steady in the month, down a marginal 0.4% and remain at similar levels compared with a year ago. In contrast, multi-unit approvals jumped by 17.5% in January 2015 to a level 24.3% higher than a year earlier.
‘Once again, the multi-unit sector continues to be the key driver of building approval results,’ said Housing Industry Association economist, Geordan Murray.
He pointed out that a sharp spike in multi-unit approvals in Queensland in January has combined with solid levels of multiunit approvals in New South Wales and Victoria to lift the national total.
‘These three states typically account for around 80% of all multi-unit residential building and when you have all three performing strongly, it’s a recipe for a strong national result in this segment of the market,’ he explained.
He also pointed out that January 2015 was only the second month on record when the total number of multi-unit dwellings approved eclipsed the number of detached houses approved. ‘But this is certainly no indictment on the performance of the detached house market which continues to maintain healthy approval numbers. Changing consumer preferences, demography, affordability challenges and aspects of the policy environment are all contributing to the current situation where a larger share of new homes are in the form of attached dwellings,’ he added.
During January seasonally adjusted new dwelling approvals increased most strongly in Queensland with growth of 47.8% followed by South Australia at 22.3% and Victoria at 3%.
Declines in new home approvals were recorded in New South Wales with a fall of 4.2%, Western Australia down 11.6% and Tasmania down 9.3%. In trend terms, new dwelling approvals fell in the Northern Territory by 10% and the Australian Capital Territory saw a decline of 5.7%.
The HIA’s most recent national outlook report identifies 2014/2015 as the year when a record number of new homes will be built although it says that wide geographical divergences are still evident, trading conditions are more competitive than ever, and the renovations part of the market is still soft.
‘National new home building activity is the star of the housing show with a record level of 195,936 new dwelling commencements forecast for 2014/2015. That result would represent growth of 7.7% and cap a third year in a row where new home construction has headed higher,’ said HIA chief economist, Harley Dale.
He pointed out that record building needs to continue to ensure that supply in coming years meets the requirements of a growing and ageing population.