Apartments give dwelling approvals a pulse

“The uptick in dwelling approvals in November 2016 is welcomed by Master Builders. However, the fall in dwelling approvals in NSW and Victoria is a growing concern. In trend terms, dwelling approvals in NSW and Victoria fell by 4.3 per cent and 2.5 per cent respectively. This adds to five straight months of falling dwelling approvals in NSW and six straight months of falling dwelling approvals in Victoria.” Matthew Pollock, Master Builders Australia’s National Manager – Housing said.

“With high population growth expected in Sydney and Melbourne, and persistently high house price growth and auction clearance rates over the past couple of months, it is important that residential building activity keeps pace with underlying demand. Otherwise supply constraints may push up house prices and put further pressure on future housing affordability, particularly in Sydney and Melbourne,” he said.

“Double digit house price growth in some parts of Sydney and Melbourne in 2016 and persistently high auction clearance rates suggests demand is still high, making the supply of new houses key to bring price growth back to more sustainable levels,” Matthew Pollock said.

“Dwelling approvals in Western Australia recorded a third straight month of growth, in trend terms. The latter is a welcome reversal of fortunes after almost two years of month-on-month declines in dwelling approvals in Western Australia since 2014. A sustained improvement in dwelling approvals during the latter half of 2016 supports a more positive outlook for residential building activity in Western Australia in 2017,” he said.

“These latest results reflect the experience of Master Builders members and is confirmed in the December quarter 2016 Master Builders National Building and Construction Survey that noted positive prospects for residential builders for the next six months before a weaker period for residential building in the second half of 2017,” Matthew Pollock said.

Nationally, apartments led the trend, growing 18.5 per cent over the month in seasonally adjusted terms. But it may be too soon to call a rebound in dwelling approvals. Despite showing an improvement on the October data, total dwelling approvals are still the lowest they’ve been since September 2014,” Matthew Pollock said.