When will it end? That is the question on everyone’s lips about Australia’s very long run of dwelling approvals growth and stability at peak levels. With dwelling approvals up 5.2% in aggregate and free-standing dwelling approvals rising a solid 3.6% over the year-ended August, it is little wonder there is speculation.
Australia’s dwelling approvals over the year-ended August totalled 226,687 separate approvals, a cracking result that appears to be above the level of stability. Detached dwellings, as shown in the chart below, accounted for 53.5% of the approvals for the year.
To go straight to the dashboard and take a closer look at the data, click here.
The forestry and wood products sector loves to see the stable red line in the chart. It shows that free-standing houses, on a year-end basis, are continuing to be approved and ultimately, built. However, the signs are beginning to emerge that a slow down in approvals has commenced. House approvals declined 5.6% in August 2018, compared with the prior August for instance.
The good news for the total housing market is that having waned for a year or more, as the table below shows, multi-residential dwellings (apartments and the like, not the flats in 1 to 3 storey blocks for which there seems there is now little love) are again exhibiting some growth.
| Description | YE Aug ’17 | YE Aug ’18 | % Change |
| Houses | 116,961 | 121,190 | 3.6 |
| Semi-Detached, 1 Storey | 9,499 | 9,295 | -2.1 |
| Semi-Detached, 2 Storey | 26,163 | 26,785 | 2.4 |
| Flats 1 or 2 Storey | 2,217 | 1,533 | -30.9 |
| Flats 3 Storey | 4,829 | 3,520 | -27.1 |
| Flats 4 Storey | 55,841 | 64,364 | 15.3 |
| Total Dwelling Units | 215,510 | 226,687 | 5.2 |
First, we can look to the Semi-detached 2+ Storey dwellings – townhouses – their annualized 2.4% growth is similar to that of Houses and in many respects can be viewed as the modern equivalent, especially within inner-urban environments.
Second, and more importantly, we look to growth in Flats of 4+ Storey – most of which is high-rise apartment developments. The lift of 15.3% to 64,364 approvals added around 8,500 dwelling approvals over the year-ended August. Some of that will of course be in the mid-rise (4 to 8 storey usually) space in which there is so much interest in the forestry and wood products industries, right now.
Just as ‘dwellings aint dwellings’ as the data above shows, ‘regions aint regions’ either, so it is useful to look at approval on a state-by-state basis. The chart below barely accentuates this point, but dwelling approvals in Victoria are absolutely booming, compared to the other major population states.
To go straight to the dashboard and take a closer look at the data, click here.
Over the year-ended August, Victoria approved 74,458 dwellings, up 16.2% on the prior year. This was bested by Tasmania, which racked up approvals for 2,984 dwellings, a rise of 28.1% off the admittedly low base.
By contrast to Victoria, approvals in NSW were down 0.7% to 69,815 and in Queensland they rose by 0.3% to 42,541.
So what is different in Victoria, to the rest of the nation? Drilling into the Victorian approvals data, we can see in the chart that both Houses and 4+ Storey Flat approvals rose over the last year.
To go straight to the dashboard and take a closer look at the data, click here.
Victoria’s approval of houses totalled 39,743 over the year and was up 10.3%, compared with the national average of 3.6%, and its approvals of 4+ Storey flats amounted to 19,780 separate dwellings up a large 45.2%, compared with the national average of 15.3%.
In Victoria’s approvals data we can see that there is a pipeline of housing construction work across the board. This has largely been fuelled by population growth in the State, rather than some catch-up of chronic under-supply. What may be of interest is how long the approved house takes to get itself built.
