Housing approvals down 13.2% year-ended March

Australia’s residential dwelling approvals declined below 200,000 units per annum for the first time in three years, over the year-ended March 2019. Approvals fell 13.2% compared to the prior year, to total 198,533 separate approvals. The big losers – for the different formats at least – were flats and apartments, with annual declines recorded between 27.9% and 40.1%.

Approvals of free-standing houses were down just 4.4% to 115,373 separate dwellings, accounting for 58.1% of all approvals over the year. The chart below shows this, to some extent, demonstrating that the decline in house approvals (the red line) is barely noticeable compared to the total decline (the green line).

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

The next chart shows the absolute thumping that flats and apartments received over the last year. There is little point on dwelling on Flats of 1 or 2 Storey or Flats of 3 Storey, because no one wants to dwell in them any more. At just 1,687 +6.8%) and 2,728 (-40.1%) approvals respectively, these formats are bordering on the nationally irrelevant from a data perspective. 

Our attention should be on the more voluminous 4+ Storey apartments, shown in red for emphasis, approvals of which were smashed down 27.9% to just 46,809 approvals over the year-ended March.

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

We supply the emphasis because the distinction between approvals of houses and 4+ Storey apartments to demonstrate that they are in fact different markets.

It is reasonable to anticipate that total dwelling approvals will decline further in coming months. Those are the expectations of most commentators and forecasters for instance. At the same time however, a slow down in dwelling approvals will clearly impact some formats more than others – houses much more than apartments, fairly obviously.

It is instructive to also examine the fortunes of Townhouses, as the chart below shows, again compared with houses, and over the same time period.

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

Over the last year, approvals of single storey Townhouses declined 25.9% to 7,839 approvals, while 2+ Storey Townhouse approvals were 9.3% lower at a still solid 24,097 approvals. It seems for Townhouses, the ‘build up’ rule is taking hold. That is, on smaller and more valuable parcels of land, dwelling size is dictated by the height of the dwelling.

What does this tell us about the recovery of the housing market that seems set for late 2019 or early 2020?

Well, of course its uncertain, but Houses, 2+ Storey Townhouses and 4+ Storey Apartments will be the dominant formats.

It is also worth a moment examining the housing market on a state-by-state basis. The chart below shows approvals by State and Territory over the same five-year period.

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

It is not immediately clear, so the table below assists in showing that in general, the smaller States and Territories fared better than the main markets of NSW, Victoria and Queensland.