Housing approvals strong in Australian cities despite over supply concerns
Despite repeated warnings around apartment oversupply and settlement risk, the number of dwellings being approved for construction across the capital cities remains unquestionably strong.
The number of new homes being built in capital cities in Australia remains high despite warning about an oversupply of apartments, new data shows.
In July 2016 there were 17,380 capital city dwelling approvals, the highest number of approvals since October 2015 and the third highest monthly number of capital city dwelling approvals on record.
This amounts to a substantial rebound following a recent slowdown in capital city dwelling approvals, according to the latest report from real estate firm Core Logic.
A breakdown of the figures shows that there were 6,482 houses and 10,898 units approved for construction across the combined capital cities. There have now been more units approved for construction than houses across the combined capital cities for 22 months in a row.
Over the 12 months to July 2016 some 57.9% of all capital city dwelling approvals were for units while over the past year there have been 76,356 capital city houses and 104,835 capital city units approved for construction.
The data also shows that in Sydney, Melbourne, Brisbane and Canberra there have been more units than houses approved for construction over the past year.
In Sydney there were 54,667 dwelling approvals, an increase of 7.3% year on year of which 16,360 were house approvals, a rise of 3.2%, and 38,307 unit approvals, a rise of 9.1%.
In Melbourne there were 57,428 dwellings approvals, down 0.2% over the year of which 25,880 were for houses, up 11.2%, and 31,548 were units, down 7.9%.
In Brisbane there were 30,901 dwelling approvals over the past year, a rise of 4% with 11,210 houses and 19,691 units, a fall of 1.4% and rise of 7.4% respectively.
In Adelaide there were 10,018 approvals, up 10.9% year on year consisting of 6,119 houses and 3,899 units, up 9.3% and 13.5% respectively.
In Perth the number of annual dwellings approvals fell by 24.3% over the year to 20,963 with 14,202 house approvals, down 26.7%, and 6,761 unit approvals, down 18.6%.
In Hobart there were only 989 new dwellings approved for construction over the year of which 799 were houses, down 22.7% and 190 units, down 10.8%.
In Darwin there were 1,304 dwelling approvals over the past year which was 12.7% lower year on year. There were 657 house approvals, down 22.8% 647 unit approvals, up 0.6%.
In Canberra there were 1,129 house approvals, down 8.1% year on year and 3,792 units, up 24.7% year on year.
Despite policy makers and analysts, including Core Logic, voicing concerns about the level of housing construction currently underway, particularly for units, approvals in capital cities generally remain unquestionably strong.
‘From here it will be interesting to see how many of these approvals immediately progress to commencement and ultimately through to a completion,’ said Core Logic research analysis Cameron Kusher.
‘Tighter lending conditions for both developers and purchasers for off the plan units is likely to result in a larger proportion of approvals that don’t proceed through to a finished product,’ he explained.
‘The data also reiterates why purchasers of off the plan units in major capital city housing markets should be very selective with regard to the types of units they purchase,’ he added.