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Housing Market Strength Continues as Policy Debate Rages

Residential dwelling approvals continued to rise in February 2015, with a 10.6% rise in free-standing dwellings compared with February 2014. However, this rise was dwarfed by the 17.8% leap in approvals for apartments (Apartments of 4+ storeys). In total, Australia’s housing approvals grew by a very strong 10.6%, with only modest signs of a flattening out in growth emerging in coming months.

The chart below shows Australian residential dwelling approvals, by type, for February 2015 and February 2014.

Story3-1

The influence of free-standing dwellings and larger apartment complexes is clear to be seen. Growth on this comparative basis was almost across the board. However, Semi-detached Dwellings of 1 storey and Flats of 1 or 2 Storeys both declined, down by 14.9% and 2.8% respectively on the February 2015 versus prior-corresponding-period basis.

To give a different view to this data, the pie chart that follows shows residential dwelling approvals for February 2015, by type.

  Story3-3

The point of this emphasis is to demonstrate that despite the hype about apartment living and changing demographic and socio-economic profiles as they relate to housing, free-standing dwellings, including new approvals, still dominate the market. Their growth is on trend with the national average growth. 

It is true that Apartments of 4+ Storeys are growing most rapidly and strongly, but they are, in the main, drawing growth from the other, smaller blocks of attached dwellings, not from free-standing houses.

Considered on a state basis, over the same comparative periods, growth has been strongest in Victoria (19.7%) and Queensland (13.0%) as the chart below shows.

Story3-4

Drilling into the Victorian data specifically and only for comparative purposes, the national trend holds broadly true. That is, approvals for Free-standing Dwellings grew 14.1% in February 2015 compared with February 2014 and Apartments of 4+ Storeys grew a whopping 39.5%. A decline of 7.1% was experienced for Single Storey Semi-Detached dwellings, however Semi-Detached Dwellings of 2+ Storeys defied the national data and increased 17.2%, albeit from a low base.

While Residential Dwelling Approvals continue apace and show little sign of abatement, the policy debate continues on housing, including in the arena of taxation policy, with investor-friendly negative gearing under close scrutiny in the lead up to the 2015 budget. 

The next edition of Statistics Count will include some updated commentary on the critical areas of policy from a residential dwelling perspective.

For further details, go to the FWPA Data Dashboard

 

Posted Date: April 29, 2015

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