The home building boom looks like continuing until the end of this year after another record month for approvals in March.
The Australian Bureau of Statistics said yesterday the number of dwellings approved rose 17.4% in March (seasonally adjusted), on top of the 20.1% rise in February.
The 37+% rise in the two months more than offsets the surprise 19.4% decline in January.
The solid performance in March came a day after housing finance figures also showed a solid performance with 5.5% rise from February, thanks to a big gain for investors.
The ABS said the value of total building approved jumped 36.3% to reach a record high, in seasonally-adjusted terms of $15.56 billion.
The value of total residential building rose 22.9% to $8.9 billion, driven by a 25.4% rise in new residential building (to $7.8 billion).
Residential alterations and additions rose 7.3%, reaching an all-time high to $1.072 billion, the first time ever this has been a billion dollars or more in a single month.
The value of non-residential building reached an all-time high (up 59.4% to $6.6 billion), driven by a large rise in both private and public projects in March.
Growth in private houses slowed sharply in March to just 0.1% from the huge 57.5% jump in February.
In a statement with the release Daniel Rossi, the ABS’s Director of Construction Statistics said: “The total number of dwellings approved in March was the second highest recorded, only exceeded by the November 2017 result.”
Private sector dwellings excluding houses drove the increase, rising 63.6%.
“The number of private sector house approvals also remained at elevated levels due to HomeBuilder, edging up 0.1 per cent to a new record high in March,” he said.
The ABS said “total dwelling approvals rose in New South Wales (26.9 per cent), Victoria (24.7 per cent), Queensland (12.1 per cent) and South Australia (3.5 per cent), in seasonally adjusted terms. Total dwelling approvals in Western Australia and Tasmania fell (-6.4 per cent and -4.8 per cent respectively).”
“Approvals for private sector houses rose in Victoria (7.8 per cent) and South Australia (3.6 per cent), in seasonally adjusted terms. Falls were recorded in New South Wales (-10.5 per cent), Queensland (-4.0 per cent) and Western Australia (-0.1 per cent).”
In a note on Wednesday afternoon, AMP chief economist Shane Oliver said the solid data was not unexpected given the ending of the Home Builder grant.
“The rush to meet the deadline for the HomeBuilder subsidy at the end of March has likely brought residential approvals for new buildings and additions forward which will likely result in some softness in the months ahead.
“However, the surge in approvals points to a significant rise in dwelling construction activity over the remainder of this year.
“This is good news for the economy and jobs and against the back drop of the collapse in population growth holds out the prospect that the property market will move into a situation of underlying oversupply in the next year or so which should slow the gains in home prices and help improve affordability,“ Dr Oliver added.
