Building approval numbers are at their highest in more than 20 years, data shows, after the fifth consecutive month of rises.
Figures released by the Australian Bureau of Statistics (ABS) reveal that in November 2020, 17,205 dwelling units were approved, 67 per cent of which were private houses.
Daniel Rossi, Director of Construction Statistics at the ABS, said: “Approvals for private houses have surged 40 per cent since June. Federal and state housing stimulus measures and low interest rates have resulted in strong demand for detached dwellings.”
HIA Economist Angela Lillicrap confirms it’s the highest number since December 1999.
“While HomeBuilder was the catalyst for improving consumer confidence in the housing market, the strength of detached building approvals is due to several factors, including low interest rates,” she explains.
“Detached house approvals increased by 24.8 per cent in the three months to November 2020 compared to the preceding three months and are 31.4 per cent higher than the same time last year,” she adds.
HIA New Home Sales data suggests that detached house building approvals will continue to be strong over the coming weeks and months, too.
“The extension of HomeBuilder at the end of November is not a factor in this month’s result but will see the strength in detached house approvals extend into 2021,” Angela says. “The Northern Territory has seen the largest improvement over the last three months, with detached house approvals more than double the same time last year, [although] it’s important to note that this improvement is from very low levels of activity a year ago.
“Western Australia follows closely behind with an increase of 89.1 per cent in the three months to November compared to the same period last year. This is due to the pent-up demand for new housing in the state, combining with HomeBuilder and the state government stimulus measures.”
Apartments and other multi-unit approvals have seen nowhere near the same boom levels.
“Multi-unit approvals remain 9.7 per cent lower in the three months to November 2020 compared to same time a year earlier,” Angela reveals.
“The multi-unit projects that gained approval in November likely commenced the planning and building approval process years ago. The apartment market is likely to be constrained going into 2021 due to slower population growth and a stronger preference for detached houses,” she concludes.