Houses easing but multi-res crashing

Australia’s softening housing market continued to weaken in November 2018, with year-end approvals down 3.9% compared to a year earlier. All of the weakness is in the multi-residential arena, where all formats have recorded approvals declines. By contrast, the bedrock of the Australian housing economy: free-standing houses, are still showing annualised growth (1.4%), but that will not last long.

The first chart below shows total residential dwelling approvals, including monthly free-standing houses (blue-bars) and their annualised approvals (red line), as well as aggregate dwelling approvals (green line).

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

As the table below shows, the only annualised approvals still displaying any growth, as the table below shows, are free-standing houses. They too will shortly turn to the year-on-year negative.

Of immediate importance is that total monthly approvals for November were 31.3% lower than in November 2017, totalling 16,059 approvals for the month.

Compared with a year ago, all housing formats experienced declining approvals in November, with none spared the pain.

Approvals of Houses were 7.4% lower than a year earlier at 10,084 dwellings, while monthly approvals of the volatile 4+ Storey Flats were 66.0% lower than in November 2017, falling to 2,950 separate approvals.

We can see below that no major state has been spared the declines over the last year.

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

If there is a distinction between the state experiences, it is that dwelling approvals in NSW fell 9.1% over the year-ended November (65,601), while those in Victoria fell 2.1% (69,523), Queensland 2.3% (41,052) and SA 1.9% (12,022). Among the main states, only WA was down more than NSW. Its decline of 14.8% (16,752) is best understood in the context of the unique elements of the state’s minerals economy.

For contrast, we will examine the NSW experience against that in Queensland.

NSW approval experience is quite similar to that of the nation as a whole, shown in the first chart. To be expected perhaps, but in a state where house prices are the biggest issue, we may have expected a larger drop-off of free-standing dwellings. But that has not occurred.

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

Over the year-ended November, New South Wales free-standing house approvals were up 1.7% to 29,807 dwellings. Equally consistent with the national trend, the State’s multi-residential dwelling approvals were all lower, as the next chart and the table demonstrate.

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

While NSW ‘hugs the index’, the same cannot be said of Queensland, where total approvals fell 2.3% over the year-ended November 2018.

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

Unlike NSW, free-standing dwelling approvals declined 3.5% (24,804), and most multi-residential dwelling formats experienced significant falls. We can see this in the chart and table below.

But, and there is always a but, approvals of 4+ Storey apartments in the Sunshine state actually rose 10.3%, to 8,280 separate dwellings. Again, there’s no particular surprise in Queensland’s dwelling growth being different to that of NSW, and none at all that the difference is largely in multi-storey apartment developments.

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

None of the comparisons can diminish the key point here. Australia’s residential dwelling approvals are declining, and have further to fall yet. But free-standing houses are mainly holding their own, with the multi-residential dwelling formats in sharp and serious decline.