October Building Approvals In Surprise Increase

By Glenn Dyer | More Articles by Glenn Dyer

Building approvals continue to surprise on the upside – rising a seasonally adjusted 3.8% to a 20 year high in October from September against a market forecast for a 1% fall after September’s big 15.4% jump.

The surge in approvals for private sector housing continued for the fourth consecutive month in October and, seasonally adjusted, were at the highest recorded level since February 2000, according to data released by the Australian Bureau of Statistics (ABS) yesterday.

Private sector house approvals rose 3.1% in October to be a massive 31.7% higher than a year ago, a rise that is not sustainable for very much longer and has resulted from government income and industry support packages.

Nonprivate dwelling approvals rose 6.2% in October, a solid rise, but are still 10.6% lower than a year ago as investors wonder who will fill them next year as immigration remains slow and student and tourist numbers stay low.

Daniel Rossi, Director of Construction Statistics at the ABS, said in yesterday’s release: “The continued strong demand for detached housing follows the relaxation of COVID-19 restrictions in most states and territories.

“Record low-interest rates and a range of Federal and state-based incentives are also providing support for the housing sector,” he said.

The rise in total dwelling approvals was driven by large increases in NSW (32.1%) and Western Australia (29.7%). Falls were recorded in Victoria (15.0%), Tasmania (3.4%), South Australia (2.4%) and Queensland (0.8%).

Approvals for private sector houses jumped 37.5% in Western Australia, 9.4% in Queensland and 5.0% in South Australia. Falls were recorded in Victoria (6.9%) and NSW (4.2%).

The value of total buildings approved rose 26.1% in October, in seasonally adjusted terms.

The value of non-residential building rose 58.6%. This rise was driven by a series of large projects in the public sector, following a weak result in September.

The value of total residential building increased 9.4%, comprising a 11.5% rise in new residential building, and a 3.3% fall in alterations and additions.

Meanwhile, house prices rose across the board in all metro capitals and across the regions in November.

According to the monthly report from CoreLogic nationally, property prices increased 0.8%.

The strongest performing capitals for dwelling prices over November were Darwin and Canberra, both up 1.9%. Property prices have now hit record highs in Brisbane, Adelaide, Hobart and Canberra, according to CoreLogic.

Capital city property values increased 0.7% collectively but were outstripped by regional Australia where prices jumped 1.4% over the month (apart from regional Victoria, the rest of the regions outside the capital cities were not hit by COVID-19 at all).

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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