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Strong demand for housing remains after stimulus ends

Detached building approvals rose in August 2021, suggesting there is still strong demand for housing despite the end of stimulus measures in March according to the HIA. The Australian Bureau of Statistics has just released its monthly building approvals data for detached and multi-units data covering all states and territories. Source: Timberbiz

Residential dwelling approvals increased by 33.7% in the three months to August 2021 compared to the same time last year, with detached approvals up by 31.5% and multi-unit approvals up by 38.1%.

“The value of renovations approved also reached its second highest level on record. Households are spending money that typically would have been spent on overseas holidays, on improving their living spaces,” HIA Economist Angela Lillicrap said.

Leading indicators, including HIA’s New Home Sales data, suggest that the detached market remains robust despite lockdowns. Sales in the three months to August 2021 were 15.4% higher than at the same time in 2019 and 4.5% higher than the same time in 2018.

“This will flow through to approvals data in the coming months and will continue to create employment opportunities into the second half of 2022,” Ms Lillicrap said.

“Multi-unit approvals also increased in August 2021 to be 39.7% higher than the trough in the three months to July 2020. This increase has been driven by both semi-detached units and townhouses and apartments.

“This strong demand for apartments is particularly evident in Queensland and Western Australia where population growth is driving demand for medium density housing. The number of units approved in Queensland and Western Australia were 33.2% and 84.2% higher in the 12 months to August 2021 than in the previous year,” she said.

In seasonally adjusted terms, total residential building approvals increased in the three months to August 2021 compared with the same time last year in Western Australia (62.4%) followed by South Australia (51.5%), New South Wales (38.7%) and Queensland (37.6%). Victoria (26.5%) and Tasmania (10.7%) also recorded an increase in approvals during this period.

In original terms, building approvals declined in the Northern Territory by 38.1% and the Australian Capital Territory declined by 33.1%.