Overall there were 16,425 dwellings approved in May, an increase of 9.9%. According to the Housing Industry Association (HIA), the voice of Australia’s residential building industry, the rise takes approval numbers closer to the peak levels of the end of 2013 and January 2014.
‘The three consecutive months of declining approval numbers following the peak in January this year had caused some observers to start questioning the longevity of the home building recovery,’ said Geordan Murray, HIA economist.
‘This result gives us confidence that the recovery has a way to run yet,’ he commented, adding that 2014 should see a very strong level of new home building activity.
‘Residential building approvals reached a peak in January this year when over 17,700 dwelling approvals were recorded. To get to the record level in January it took a situation where all the ducks were sitting in a row. We had the five largest states all recording strong approval numbers at the same time,’ explained Murray.
‘Since then, the characteristic volatility in multi-unit approvals has meant that we haven’t revisited the January high but the volume of approvals still points to a very strong level of new home building activity throughout 2014,’ he added.
He also pointed out that the housing recovery, which was initially confined to New South Wales and Western Australia, appears to be gaining broader momentum. Approvals in the three months to May are markedly higher than the same time last year in all jurisdictions, ACT is the only exception.
The data shows that in seasonally adjusted terms, the volume of detached dwelling approvals was steady at 9,426, up by 0.6% in the month. There were 6,998 multi-unit dwellings approved, which represents an increase of 25.5% in the month.
A rebound in multi-unit approvals in New South Wales with growth of 47% and a rise of 150% in Queensland drove the increase in multi-unit approvals after both posted particularly weak results in April.
All other major markets recorded falls in multi-unit approvals in May, most notably in Victoria, where a decline of 19% was recorded.
Looking around the states more broadly, total building approvals in seasonally adjusted terms increased in May by 18.7% in New South Wales , by 45% in Queensland, by 0.4% in Western Australia and by 9.8% in Tasmania. They fell by 8.5% in Victoria and by 6.7% in South Australia.
In trend terms, building approvals increased by 8.7% in the Northern Territory but fell by 9.6% in the ACT.
