Detached building approvals continue to suggest there is still strong demand for housing six months after the HomeBuilder stimulus ended in March. Source: Timberbiz
“Detached building approvals in the three months to September 2021 remain up by 15.5% on the same quarter in 2020 and 32.2% up on the same time in 2019,” HIA Economist Tom Devitt said.
“This will continue to support a healthy pipeline of on-the-ground home building work to the end of next year,” he 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 September 2021 were not as high as a year earlier when HomeBuilder was gaining momentum, but are still 7.4% higher than at the same time in 2019 and 0.6% higher than the same time in 2018.
“These sales will flow through to approvals data in the coming months and will continue to create employment opportunities into the second half of 2022,” Mr Devitt said.
Approvals for multi-units also strengthened in September. The last three months are now 34.3% up on a year earlier, reflecting an improved trend in 2021.
Apartment approvals have been improving over the past year or so, led by New South Wales and, to a lesser extent, Queensland and Western Australia. This suggests investors are looking through the haze of the pandemic to a brighter outlook on the other side.
“There has also been increased activity in medium density housing, suggesting this market is also enjoying some of the shift in preferences towards lower density housing,” Mr Devitt said.
“Strong growth in detached house prices may also be adding to the popularity of medium density living.”
Approvals for renovations also remain elevated. Despite a slight decline in September, the value of these approvals is still up by 10.6% on September 2020, and the last 12 months is still up by 37.5% on the previous year.
“In addition to HomeBuilder, this has been driven by shifts in spending from services like travel, entertainment and dining out, towards housing,” Mr Devitt said.
“With Australians spending more time at home and accumulating a significant amount of savings, an increase in demand for larger living spaces is unsurprising,”
In seasonally adjusted terms, total residential building approvals increased in the three months to September 2021 compared with the same time last year in almost all jurisdictions. New South Wales led the pack (+38.5%), followed by South Australia (+30.5%), Western Australia (+28.6%), Queensland (+22.7%), Victoria (+9.7%), and Tasmania (-11.3%). In original terms, building approvals increased in the Australian Capital Territory (+9.3%) and declined in the Northern Territory (-31.7%).
