Australia’s dwelling approvals fell 7.7% over the year to the end of June, slipping to 217,314 separate approvals. The pain, in terms of approvals at least, has been felt largely in the multi-residential sector, with 4 + Storey Flats experiencing a 13.4% decline, with approvals falling to 61,956 dwellings. However, the largest declines were reserved for the other forms of Flats, with Townhouses and the mainstay ‘Free-standing houses’ performing relatively strongly.
As Statistics Count has commented before, Australia’s housing market is increasingly a two-speed marketplace.
The first chart below shows the decline in the total number of dwelling approvals on a year-end basis – the green line – while the total number of detached or free-standing houses – the red line – is relatively stable.
To go straight to the dashboard and take a closer look at the data, click here.
Despite their relative resilience, approvals for Free-standing or detached houses declined 3.4% over the year to the end of June, with total approvals slipping to 113,822. They accounted for 53.1% of total approvals, up from 50.6% for the year-ended June 2016.
However, as the chart below indicates, other housing formats – especially townhouses or Semi-detached dwellings – were also relatively strong. Single-storey semi-detached dwelling approvals declined just 1.7% over the year, while their 2+ Storey counterparts saw approvals grow 0.2% to 24,399 separate approvals.
It is clear that after the firmament of free-standing houses and the rising prospects of townhouses, dwelling approvals were tumbling down for the other recorded housing formats. 1 – 2 Storey flats saw approvals slump 24.7% to just 3,362 units, while the discrete 3 Storey flat approvals crashed 33.1% to just 3,945 units.
The largest fall, in volume terms was for approvals of 4+ Storey flats and apartments. They declined 15,6% for the year-ended June, recording 60,050 approvals and accounting for 28.0% of total approvals for the year, down from 31.0% the year prior.
To go straight to the dashboard and take a closer look at the data, click here.
The suspicion of many is that the 4+ Storey Flats and apartments definition is fast becoming a problem. The expectation is that there is growth in approvals of flats and apartments in 4 to 6 (and possibly 8) storey apartment blocks, and that there is massive decline in approvals above 8 storeys.
All of that lends itself to the ‘2 speed housing market’ theory. It also points, at a superficial level at least, to a softer landing than many might have expected.
