The boom is not over yet: 10 regions positioned for further growth
While housing values in Sydney and Melbourne are declining, an expert has highlighted that there are markets across the ...
Private sector housing approvals have reached a record high, with multi-unit apartments dropping in popularity amid the COVID pandemic, official figures have revealed.
Stats released by the Australian Bureau of Statistics (ABS) show private sector housing approvals have risen for the sixth consecutive month in December, to reach a record a new high.
The total number of dwellings approved rose 10.9 per cent in December, with all states clocking increases in seasonally adjusted terms.
Tasmania led the way, rising 66.5 per cent, followed by Queensland and South Australia, which also recorded double-digit growth.
The value of total buildings approved increased 4.9 per cent in December, in seasonally adjusted terms. The value of non-residential buildings drove the increase, rising by as much as 10.1 per cent, having dropped 27.7 per cent in November.
ABS director of construction statistics Daniel Rossi said approvals for private houses rose 15.8 per cent in December, while dwellings excluding houses expanded 2.3 per cent.
“Private house approvals were strong across the country, with Victoria, South Australia and Western Australia hitting record highs in seasonally adjusted terms. Federal and state housing stimulus measures, along with record-low interest rates have contributed to strong demand for detached dwellings,” Mr Rossi explained.
“Despite the uncertainty experienced by developers and households during 2020, the total number of dwellings approved in the calendar year was 4.8 per cent higher than in 2019,” he said.
Apartments to lag
Despite showing strong growth in the final quarter, apartment growth has been tipped to fall in 2021.
Multi-unit approvals increased by 14.4 per cent in the December quarter, compared with the preceding quarter, but dropped 12.6 per cent year-on-year.
Commenting on the data, HIA economist Angela Lillicrap said the relatively strong level of approvals is not an indication of the volume of commencements in 2021, as the planning and approval process likely kicked off prior to COVID.
“There is a divergence in the conditions facing detached builders versus apartment builders.
“Not only does the apartment market face headwinds from a lack of population growth and a preference for detached houses, yesterday’s regional migration data shows a shift away from metropolitan Sydney and Melbourne.
“The apartment market is also likely to be constrained until overseas migration returns,” Ms Lillicrap concluded.