Australian building approvals strengthened to a 19 month high in September as the green light for new private housing and apartments saw its largest monthly rise this year.
A total of 15,827 approvals were granted in September, the highest since February 2019 when 16,561 were okayed.
The monthly rise of 15.4% in total approvals was in fact the highest for more than a year.
The Australian Bureau of Statistics said yesterday that the total number of dwellings approved rose 15.4% in September, seasonally adjusted.
The rise came off the back of a 23.5% jump in apartment and unit approvals, while approvals of private houses rose for the third consecutive month, increasing by 9.7%.
The volatility of the monthly building approvals data was again underlined with the September figures showing a surge in apartment approvals.
September’s rise followed a 1.6% fall in August and a 12% rise in July.
It was the second jump in these approvals in the past three – they fell 11% in August and rose 22.7% in July.
The explanation for the lumpy nature of the approvals is pretty easy to see – the different speeds at which local government’s process applications and issue approvals. There was probably a bunch of applications that were approved in a rush to meet the end of the third quarter.
Daniel Rossi, Director of Construction Statistics at the ABS, said: “The September results indicate continued demand for detached housing following the relaxation of COVID-19 restrictions in most states and territories. A range of Federal and state-based incentives are also providing support for the housing sector.”
Across the states and territories, dwelling approvals rose in Western Australia (42.6%), South Australia (28.3%), Queensland (19.3%), Tasmania (18.8%), Victoria (12.4%) and New South Wales (4.6%).
Approvals for private sector houses rose in South Australia (19.9%), WA (15.1%), Victoria (9.7%), NSW (7.3%) and Queensland (3.6%).
The value of total building approved fell 17.0% in September, in seasonally adjusted terms. The value of non-residential building fell 36.7%.
“The decline was driven by the public sector, following a strong result in August,” the ABS explained.
The value of total residential building fell in September (0.7%), comprising a 1.0% fall in new residential building, and a 1.1% rise in alterations and additions – the boom in Renos goes on.
The improved outlook for the home building industry was underlined on Monday by a separate set of figures from the Australian Bureau of Statistics (ABS).
The ABS said the total value of new loan commitments for housing rose 5.9% in September, seasonally adjusted, with a 6% rise in the value of owner occupier home loan commitments rto $17.3 billion in September.
ABS head of Finance and Wealth, Amanda Seneviratne, said, “Approximately half of the rise in September’s owner occupier housing loan commitments was for the construction of new dwellings, which rose 25.3 per cent”.
This followed a 19.2 per cent rise in August.
“Owner occupier housing loan commitments are at historically high levels, consistent with low interest rates and government incentives. For example, it is likely that the HomeBuilder grant is contributing to increased demand for construction loans”, Ms Seneviratne said.
Meanwhile, house prices rose last month for the first time with a gain of 0.2%.
Capital city house prices rose 0.4% while unit prices eased 0.2%.
Melbourne was the only capital city across the country recording another decline in values following strict lockdowns to manage the coronavirus pandemic (although as the above ABS data shows, that hasn’t stopped home approvals in Victoria continuing at a faster pace).
With every other capital city across the country recording a bounce back there is now growth nationally for the first time since April, CoreLogic data showed.
Regional home prices jumped 0.9% to continue to outperform metro areas.
Sydney house prices rose half a percent to $993,927 over the month but apartment prices fell the same amount to $735,350. Overall median property values jumped 0.1%.
Melbourne property values dropped 0.2%, led by a 0.3% decline in house prices to $780,574 but offset slightly by a 0.1% rise in apartment prices to $561,881. This was the smallest recorded price fall since April.
AMP chief economist Shane Oliver said the 0.9% rise in regional dwelling prices reflected “lower levels of indebtedness and hence less vulnerability to the financial stresses caused by the economic downturn, less exposure to the slump in immigration and increased buyer interest as some people seek to relocate from cities as part of a secular trend towards working from home and a greater focus on lifestyle.”
He said the rise in metro house prices and fall in metro apartments “likely reflecting a shift in lifestyle preferences towards houses as a result of more working from home and a lifestyle choice and as weak rental conditions made worse by the slump in immigration weigh on the unit market.”
The rise in the value of housing finance as well as the surge in approvals will be welcomed by the Reserve bank at today’s historic board meeting.
While building approvals for new private dwellings and non house dwellings rose in every state, including Victoria, the value of owner occupied home loans fell in Victoria by 8.8% in September. They also dipped in Tasmania.Both reflected restrictions on home sales.
The ABS said the fall in commitments for existing dwellings in Victoria was partly offset by a rise in commitments for construction of new dwellings.
As well the total number of owner occupier first home buyer loan commitments rose 6.0%, reaching 13,040 loan commitments, seasonally adjusted.
The total value of loan commitments for investor housing rose 5.2% to $5.3 billion, an increase of 5.2 per cent.
…
