‘Softer’ market conditions to open up more opportunities for upsizers, experts say
After two years of facing several hurdles, experts say that upsizers should take advantage of the softening market condi...
Six months after the HomeBuilder scheme ended, housing demand is still on an upward trend as approvals for detached dwellings remained elevated in September.
The latest data from the Australian Bureau of Statistics (ABS) revealed that approvals for detached homes rose 15.5 per cent and 32.2 per cent in the three months to September compared to the same quarter in 2020 and 2019, respectively.
The quarterly gains come six months after the Homebuilder scheme ended in March 2021, indicating that the demand for housing remains strong even after the withdrawal of federal support.
Commenting on the data, Housing Industry Association (HIA) economist Tom Devitt said the strong growth in detached dwelling approvals would continue to “support a healthy pipeline of on-the-ground home building work to the end of next year”.
“Leading indicators, including HIA’s New Home Sales data, suggest that the detached market remains robust despite lockdowns,” he said.
While sales in the September 2021 quarter are not as strong as they were last year — when HomeBuilder demand was at its peak — the figures are still 7.4 per cent higher than in 2019 and 0.6 per cent higher than the same time in 2018.
“These sales will flow through to approvals data in the coming months and will continue to create employment opportunities into the second half of 2022,” Mr Devitt said.
Improving trend for apartment approvals
Approvals for multi-units also improved during the period, indicating that investors are now looking beyond the pandemic with a more optimistic outlook.
Data showed apartment approvals rose by 34.3 per cent in the three months to September 2021 from the same period last year.
NSW had the highest number of apartment approvals during the period, followed by Queensland and Western Australia.
The report also showed that there was increased activity in medium-density housing, which could suggest that the market is also benefiting from the shift in preferences towards lower-density housing. The price gains in the detached housing segment may also be adding to the appeal of medium-density homes.
Mr Devitt also highlighted that while renovation approvals experienced a slight decline in September, it still “remains elevated” by 10.6 per cent compared to the same period in 2020 as people continue to cope with the lingering effects of the pandemic.
“In addition to HomeBuilder, this has been driven by shifts in spending from services like travel, entertainment and dining out, towards housing,” the economist noted.
“With Australians spending more time at home and accumulating a significant amount of savings, an increase in demand for larger living spaces is unsurprising.”
Total building approvals rose in most states
In seasonally adjusted terms, total residential building approvals increased in the three months to September across all states, except Tasmania.
NSW led the pack with 38.5 per cent, followed by South Australia at 30.5 per cent and Western Australia at 28.6 per cent. Queensland and Victoria’s total residential building approvals rose by 22.7 per cent and 9.7 per cent, respectively.
Meanwhile, Tasmania saw 11.3 per cent fewer approvals for new residential buildings.
In original terms, building approvals increased in the ACT by 9.3 per cent, while the Northern Territory experienced a decline of 31.7 per cent.