Near universal consensus that Australia’s dwelling approvals have peaked and begun the inevitable downturn comes as little surprise after more than a year of expectations that a slow-down was imminent. For the year-ended March, total dwelling approvals were 4.6% lower than the prior year, totaling 224,095 separate dwellings.
Compared with February, approvals were 1.3% lower.
However, as the chart below shows, the decline in total approvals (the green line) is evident and is clearly slowing faster than approvals of free-standing dwellings, set out in the red line.
To go straight to the dashboard and take a closer look at the data, click here.
On the same year-on-year basis, free-standing dwelling approvals have declined just 2.9% and in March, monthly approvals were 8.0% higher compared with February. To add more context to this, in March 2016, free-standing dwellings accounted for 51.6% of total dwelling approvals. By March 2017, they accounted for 59.0% of the total.
The implication is that the decline in residential dwelling approvals is occurring for housing types other than free-standing dwellings. The chart below displays this, but only to February 2017.
To go straight to the dashboard and take a closer look at the data, click here.
While free-standing dwellings have remained relatively strong and declined by the reported 2.9% over the last year, it is some of the other reported housing formats that have slumped.
Flats 4+ Storey (the apartment towers) have seen approvals decline 6.6% over the year-ended March, but for the month of March itself, the decline on the prior March was a staggering 55.5%, totaling just 2,664 approvals for the month.
Although a decline is clearly underway for the tallest dwellings, it pales to modest significance beside the decline in some of the other formats. Flats of 3+ Storeys fell 36.4% on the prior year. Just 4,379 approvals were recorded over the last year. Flats of 1 & 2 Storeys fell 30.3% and totaled just 3,169 approvals for the year. They are, with all due respects, becoming irrelevant to the nation’s future housing profile.
But its not all downhill for the multi-residential dwelling formats. The semi-detached townhouse formats are having a very different experience. 1 Storey townhouses declined 3.4% over the year, totaling 8,649 approvals (3.9% of all approvals).
But the most important story of all might be the 3.2% growth in approvals of Townhouses of 2+ Storeys. Amounting to 24,476, approvals for the year are up 10.9% on the prior year, as these mid to high-density dwelling options continue the quiet urban infill revolution.
Blocks of flats of all sizes are either slumping or have become irrelevant. Free-standing dwellings and townhouses are the strength in Australia’s housing, both now and in the near future.
