House-building growth to continue post-HomeBuilder

Looking into historical data, Dr Wilson noted a continued acceleration in house-building approvals despite the fact the initial HomeBuilder offer of $25,000 wound up in December last year, while the reduced $15,000 subsidy ended in March.

Recent figures from the Australian Bureau of Statistics (ABS) have revealed an acceleration in the growth rate of house-building approvals over February, with an annual record of 124,701 reported over the 12-month period.

Among the capital cities, Perth emerged as the winner with growth reaching 118 per cent over the first two months of 2021 compared to the same period the year prior.

However, the total number of Perth’s building approvals stood at 1,902, just below Melbourne with 2,662.

The smallest number of approvals was recorded in Adelaide at 933, followed by Sydney (1,321) and Brisbane (1,393).

Despite lagging behind in total approvals, Sydney was still able to record the highest average building cost per approval at $368,643, followed by Melbourne at $339,268, Brisbane at $305,431, Perth at $274,838 and Adelaide at $260,095.

While a momentary decline in approvals is expected shortly after the withdrawal of HomeBuilder, and other direct stimulus measures, Dr Wilson opined that the benefits will be maintained in the medium-term.

“Numbers are likely to continue to rise over coming months supported by generally strong housing markets, and a revived and growing economy,” he added.

Units continue to struggle

Contrasting the results for house-building approvals, new apartment development activity continued to lag.

ABS figures showed that building approvals for higher-density dwellings declined significantly by 29 per cent over the first two months of 2021, compared to the same period last year – the lowest annual activity levels in nine years.

Of the major capital cities, only Perth recorded an increase in unit-building approvals over the year ended February 2021, with yearly growth at 8.7 per cent.

Meanwhile, Adelaide unit approvals were down 46.4 per cent, Melbourne by 37 per cent, Sydney by 9.6 per cent and Brisbane by 4.6 per cent.

Ultimately, Dr Wilson said, despite the booming housing market and record levels of building approvals for new homes, there is no sign of revival in higher-density residential development as unit approvals continue to tumble.