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New data from the Australian Bureau of Statistics has revealed an unprecedented increase in the volume of detached buildings being built in Australia over the last year.
April 2021 saw monthly detached building approvals in Australia reach record highs for the third month in a row.
The data highlighted an increase in the number of detached housing approvals over the last three months, rising from 14.8 per cent. Compared with April 2020, the current level of detachable housing approvals represents a 63.7 per cent increase.
Broken out by the state, Western Australia saw the biggest seasonally adjusted gains with a 159.2 per cent increase versus April 2020. South Australia followed in second place with 93.3 per cent.
HIA economist Angela Lillicrap observed that “there is an unprecedented volume of building starts set to occur in 2021. HomeBuilder and low interest rates have facilitated in [sic] a surge in demand for detached homes that will see a record number of detached homes built this year and into 2022”.
Earlier this week, the Reserve Bank of Australia announced that it would continue to hold the cash rate at a record-low 0.1 of a percentage point.
Going forward, Ms Lillicrap predicted that the combination of low interest rates and strong house price growth will continue to drive demand for additional detached dwellings.
According to her, “Detached housing approvals are expected to stay elevated for several more months, consistent with the results in more timely leading indicators such as HIA’s New Home Sales Report.”
Ms Lillicrap also noted that “the value of renovations activity approved is also elevated, up by 49.7 per cent in the three months to April 2021 compared to the same time last year”.
“This is the highest quarterly result since records began in 1973,” she said.
The federal government took credit for the result.
Minister for Housing Michael Sukkar said, “This near-record set of numbers is further proof that the Morrison government’s plan for housing is working and underpinning Australia’s economic recovery.”
“Our HomeBuilder program has played a vital role in achieving this outcome. The fact that 146,000 housing starts are expected to be completed up to September 2021 is not only a fantastic result for this part of the housing sector but for jobs in construction as well,” Mr Sukkar said.