Housing approvals in Australia’s most populous state – New South Wales – have softened over the last year, but the detailed state data suggests that is almost entirely because of falling 4+ Storey Flat approvals. They slumped 12.8% for the year-ended March, totalling 29,121 separate approvals, while at the other end of the spectrum, Free-standing house approvals fell a modest 2.5% totalling 28,918 approvals.
The NSW data is all the more instructive because approvals of the two main formats, as the chart shows below are almost exactly the same. Between them, they delivered 82.9% of total approvals for the last year, but of course, with very different land-use implications.
To go straight to the dashboard and take a closer look at the data, click here.
The slowing of 4+ Storey Flat approvals is no particular surprise and is part of the national trend. As Statistics Count has discussed previously, there is strong evidence that this housing format suffers from speculation that is itself often fuelled by the general state of the economy, or at least, perceptions of its strength.
But free-standing dwellings are a different matter. Their decline implies that pent-up demand has been met and that the population in NSW is not growing sufficiently quickly to fuel continued growth.
Maybe.
But there could be another explanation: free-standing housing formats are losing market-share to their close cousins, the Semi-detached dwellings that make up urban infill environments and similar housing situations. The data certainly suggests this could be the case.
The chart below shows only the Free-standing houses and Semi-detached 1 Storey and Semi-detached 2 or more Storey approvals.
To go straight to the dashboard and take a closer look at the data, click here.
Against the decline in Free-standing house approvals over the last year (-2.5%), it is observable that approvals of Semi-detached single storey dwellings (shown in red) rose over the same period. Albeit a smaller number in total, approvals lifted 31.2% to 3,555 for the year. Growth in approvals of Semi-detached of 2 or more Storeys was 6.2% over the same period (shown in green), reaching 6,390 approvals for the year-ended March.
When we place those solid increases in approvals with Free-standing houses, approvals of these ‘family friendly’ formats rose 1.3% over the last year in NSW and accounted for 55.5% of total approvals.
On a combined basis, the strength in dwelling approvals is a mix of these lower-rise formats, with some observable switching between them. The next question – and one we cannot answer here – is what drives the switching from one format to another.
