Dwelling Approvals Up 5% YoY

Clocking in at 228,875 separate dwellings for the year-ended July, Australia’s housing approvals were 5% higher than a year earlier, continuing to defy orthodox expectations of collapse. Approvals are more patchy across the country – those in Victoria are up a massive 16.7% for instance – but the new dwelling market remains strong.

Australia’s total dwelling approvals, shown in the chart below, are certainly below their peak of 239,936 approvals which was achieved for the year-ended September 2016, but after the short-lived dip in early 2017, total approvals have been trending up.

To go straight to the dashboard and take a closer look at the data, click here.

Underlying the strength of the housing market are social and economic fundamentals like low interest rates (see an earlier item in this edition of Stats Count) and solid population growth that has fuelled demand for housing.

That shows through in the data, with free-standing dwellings (houses) shown in the red line. Their stability over the last half decade allows them to be considered the ‘base-load’ of Australian housing. House approvals totalled 121,745 for the year-ended July, accounting for 53.2% of all approvals. Good news for the wood products sector.

The chart below shows approvals by type over the last five years.

To go straight to the dashboard and take a closer look at the data, click here.

Although the chart shows total approval records could not have been achieved without the contribution of multi-storey apartments that now fill city skylines, it also demonstrates that free-standing houses continue to dominate, but share some of the upside wit other housing formats.

Not least of these are the Semi-detached One and Two Storey dwellings (the red and green bars). They are quietly growing their influence in the Australian housing landscape and seem less prone to the stellar peaks and crashing lows of the speculator driven high-rise apartments. Over the year-ended July, One Storey approvals rose 6.9% to 9,845 dwellings, while their Two Storey counterparts rose 3.2% to 26,578 approvals. Combined, they accounted for 15.9% of total approvals for the year.

While housing formats are changing, so too are the States experiencing different growth levels. We commented at the outset on the very strong growth in approvals in Victoria. They are being driven by that State’s strong population growth, and to some extent, the result of long-planned land releases.

The chart below shows approvals, by State, for the last five years.

To go straight to the dashboard and take a closer look at the data, click here.

The only regions that over the last five years have experienced declines are Western Australia and the Northern Territory. Just as with Victorian population growth on the upside, WA and the NT are impacted by changes in mining investment and activity on the downside. Local factors are important determinants of the specific strength of the housing market in any sophisticated economy.

The table below shows dwelling approvals, by state, for each of the last two years.