Apartments Drag But Housing Approvals Continue To Improve

By Glenn Dyer | More Articles by Glenn Dyer

More solid news from the housing sector in the shape of the August building approvals data from the Australian Bureau of Statistics.

After July’s strong rise, residential approvals steadied in August following the relaxation of COVID-19 related restrictions in most states and territories, according to the ABS.

While approvals for apartments and non-private dwellings fell (it’s notoriously volatile), there was another solid rise in approvals for private home construction which rose to their highest level in 19 months – since February 2019.

The number of dwellings approved in Australia fell 1.6% in August, seasonally adjusted, thanks to an 11% fall nonprivate home dwellings.

The ABS said the fall in the number of apartments approved in August partially offset the sharp 22.7% jump recorded in July.

Private sector houses rose 4.8% in August, driven by strength in Western Australia and Queensland. That was down from the 8.6% rise in July.

However, because of the fall in apartment approvals, total dwellings approvals remain close to eight-year lows.

The ABS said the value of alterations and additions to residential buildings was strong in August rising 7% or $784 million to the highest level recorded since April 2016.

The value of non-residential building approved rose 40.7% in August, driven by the public sector, while private sector non-residential (apartments etc) approvals continued to fall.

Across the states and territories, dwelling approvals fell in Tasmania (26.2%), New South Wales (14.2%), and South Australia (4.8%). Rises were recorded in Western Australia (33.8%), Queensland (8.1%), and Victoria (1.8%).

Approvals for private sector houses rose in Western Australia (34.9%), Queensland (13.9%), and South Australia (1.4%). Declines were recorded in Victoria (1.0%) and New South Wales (0.3%).

Daniel Rossi, Director of Construction Statistics at the ABS, said in yesterday’s release that:

“The August results indicate increasing demand for detached housing following the relaxation of restrictions in most states and territories. However, approvals for apartments remain weak, at near eight-year lows.”

The value of total building approved rose 18.1 percent in August, in seasonally adjusted terms. The value of non-residential building rose 40.7 percent. The rise was driven by large public projects in Queensland and the Northern Territory. The value of total residential building also rose in August (4.4 percent).

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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