Private sector house approvals rose for the sixth consecutive month in December, seasonally adjusted, and reached a record high according to data released by the Australian Bureau of Statistics (ABS) today.
Daniel Rossi, Director of Construction Statistics at the ABS, said: “Approvals for private houses rose 15.8 per cent in December, while dwellings excluding houses rose 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.
“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.
The total number of dwellings approved rose 10.9 per cent in December. Dwelling approvals rose across all states, in seasonally adjusted terms. Tasmania led the way, rising 66.5 per cent, followed by Queensland (24.0 per cent), South Australia (16.7 per cent), Victoria (8.6 per cent), Western Australia (7.8 per cent) and New South Wales (1.8 per cent).
Approvals for private sector houses also rose in all states in December; South Australia (33.6 per cent), Victoria (17.2 per cent), New South Wales (16.2 per cent), Queensland (7.5 per cent) and Western Australia (5.3 per cent).
The value of total building approved rose 4.9 per cent in December, in seasonally adjusted terms. The value of non-residential building drove the increase, rising 10.1 per cent, having fallen 27.7 per cent in November.
The value of total residential building increased 2.3 per cent, comprising a 1.4 per cent rise in new residential building, and an 8.1 per cent increase in alterations and additions. The value of residential alterations and additions reached a record high in December.
Our Views
Federal and state housing stimulus measures, along with record low interest rates have accelerated demand for detached dwellings. When viewed with the finance data released yesterday, the majority of dwelling investment is for first & second home owners into house & land packages as opposed to apartments.
The data also suggests that investors continue to avoid the apartment market and this is also evident in recent data which shows the gap emerging between house and apartment data.
The apartment investment market was support by strong migration, which is currently absent as well as foreign investment, also absent from the current market.
On this basis, we believe it is currently a good time to be acquiring apartment development sites in anticipation of an increase in demand in 2025 through to 2030.
Related Articles
