State versus State – Dwelling Approvals Head South

It is just possible that your attitude and perception to the state of the housing market depends a great deal on the state in which you reside. But in general, the further South you go in Australia, the better the new dwelling approvals look. The national decline in approvals over the last year may be 10.1%, but head to Tasmania and they are up 13.4%. 

Of course there is more than one housing market in Australia, which is to some extent clear in the chart and table below, which show the State-by-State breakdown of national dwelling approvals.

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

If we were prepared to leave aside growth in the ACT and in Tasmania, approvals are down everywhere, but in some states more than others. But for a change, we’ll let the little locations sing the loudest song, and examine their data.

Great Southern expansion – the Tasmania story

Despite being the least populous state of Australia, Tasmania is leading the charge punching well above its weight with a significant increase in dwelling approvals over the last year or more.

As the nation has cooled its housing starts, Tasmania’s have been booming. First, lets look at the data all the way back to 2000. We can see below that although there have been higher peaks (2009-10), Tasmania is almost at the top of its game when it comes to residential dwelling approvals.

On an annualized basis, Tasmania’s total approvals are up 12.4% over the year-ended February, as the green-line shows. At 3,075 separate approvals, they are within sight of the record 3,456 approvals achieved year-ended October 2010.

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

More to the point, as the house specific data shows, monthly approvals in February 2019 were 14.0% higher than in February 2018 and almost 30% higher over the year-ended February 2019. The best annual approvals data for Tasmania may still be yet to come. But, it seems that to achieve a new record in total dwelling approvals, Tasmania is going to be almost entirely reliant upon houses. It may not seem it at first glance, but the chart below is remarkable, because it shows the near absolute dominance of free-standing houses over other housing formats.

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

Over the most recent year, houses accounted for 92.8% of total dwelling approvals in Tasmania! Combined, the town-house formats contributed 5.5% and really after that, its an irrelevancy.

It is true that Tasmania’s cities do not scrape the sky – part of the attraction in fact – but the death of traditional ‘Flat’ housing formats is a surprise, even if the 4+ Storey format still has a moment’s life in it.

The Tasmanian economy, and the housing component of it, are in better shape than most of us would imagine.

Canberra calling?

These days we hear that Canberra is a ‘bubble’, which is apparently code for ‘you may ignore this place’. Well, perhaps not, but there are some things we think were fairly predictable about the seat of National Government.

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

Most obviously, those living in the ACT prefer 4+ Storey Apartment blocks more than is the case in most of the rest of Australia. In fact, as the pie-chart a little lower shows, over the year-ended February 2019, they accounted for 56.0% of all new dwelling approvals.

Second, like the rest of the country, houses are the least volatile form of dwelling approval in the ACT, although not by much.

Third, the dwelling approval boom in the ACT is no mere flash in the pan and it is not linked to just one housing format. The ACT economy, because of its population growth, is supporting increases in nearly all housing formats, defying the national trends.

Perhaps there is something the Canberra cohort knows that the rest of us are yet to cotton onto?

Turning to the larger states, thanks to population expansion, Victorian approvals bucked the national average and were just 9.5% lower than a year earlier at 65,304 dwellings year-ended February, while those in South Australia declined just 4.5% over the same period.

New South Wales (-13.6%) and Queensland (-13.4%) saw similar declines in aggregate, so how did the Premier state perform when it came to new dwelling approvals?

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

 Although it took a pasting over the last year, New South Wales’ dwelling approvals declined in similar patterns to those of the rest of the country. 

That is, with one significant exception. It booked a large fall in 3 and 4 or more storey Flats or Apartments and managed to stay ahead of the national decline in free-standing dwellings.

It pays to look beyond the headlines when it comes to examining Australia’s housing trends.