Building approvals hit record high

by Mark Rosanes02 Dec 2020

Construction approvals for private houses have continued to climb for the fourth straight month in October, hitting a level not seen since February 2000, according to the latest data from the Australian Bureau of Statistics (ABS).

Approvals across all building types increased by 3.8%, with private dwellings, excluding houses, registering a 6.2% rise and private houses posting a 3.1% ascent.

“The continued strong demand for detached housing follows the relaxation of COVID-19 restrictions in most states and territories,” said Daniel Rossi, director of construction statistics at the ABS.

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

Meanwhile, Angela Lillicrap, economist at the Housing Industry Association, said that the latest ABS figures showed the “positive impact of HomeBuilder on the detached house market.”

“HomeBuilder was the catalyst for improving consumer confidence in the housing market,” she said. “The extension of HomeBuilder will see these strong results carry on well into 2021.”

According to ABS, the rise in total dwelling approvals was driven by sharp increases in New South Wales at 32.1% and Western Australia at 29.7%. However, the figures dropped in Victoria (15%), Tasmania (3.4%), South Australia (2.4%), and Queensland (0.8%).

Western Australia led all states and territories on the number of private houses approved at 37.5%, followed by Queensland’s 9.4% and South Australia’s 5%. Building approvals fell in Victoria and NSW by 6.9% and 4.2%, respectively.

The value of all approved buildings also jumped 26.1% in October, with residential dwelling prices rising 9.4%. Newly constructed buildings comprised 11.5% of the increase. There was also 3.3% decline in renovations.

Non-residential buildings also experienced a huge surge in value at 58.6%. The rise was driven by a series of large projects in the public sector, following weak results in September.