Canberra housing approvals slump

While approvals for construction of new homes jumped nationally, defying expectations of a downturn, Canberra approvals slumped.
Nanjing Night Net

The Australian Bureau of Statistics’s latest data shows dwelling approvals rose 11.7 per cent in November in seasonally adjusted terms, up from 0.9 per cent, above the market expectations of a 1 per cent decline.

Approvals for apartment construction were up 5.6 per cent in Victoria but they plunged by nearly 22 per cent in the capital.

The ABS’s director of construction statistics, Justin Lokhorst, said the rise in approvals was driven by the renewed strength in approvals for apartments.

“Approvals for private sector houses have remained stable, with just under 10,000 houses approved in November 2017,” Mr Lokhorst said.

Masters Builders ACT chief executive Michael Hopkins said the figures reflected a general trend of declining building approvals in the territory, with an increasing amount of demand for new housing being met by surrounding regions beyond the ACT borders.

“Monthly building approval statistics for a small market like Canberra need to be interpreted with some level of caution because of the high degree of volatility,” Mr Hopkins said.

“The decline in the November building approvals are driven mostly by a drop in apartment and unit approvals, which have fallen from 611 in August to 38 in November. Apartment and unit approvals are now around the February 2015 levels.”

He said approvals for single housing have performed better in recent months, with 103 new housing approvals recorded in November, slightly under the 10-year average of about 120 single housing approvals.

“What the ABS data doesn’t show is how much demand for new housing in Canberra is being serviced by regional areas beyond the ACT borders,” he said.

“Feedback from Master Builders members indicates that an increasing amount of new housing is now being supplied in areas like Googong, Queanbeyan and Murrumbateman to service demand from Canberra.

“Master Builders ACT expects that with the current tax and land release settings this trend will continue.”

Dwelling approvals also increased in Tasmania by 3.1 per cent and South Australia by 0.1 per cent, but for the rest of the country it decreased. In the ACT it dropped 21.9 per cent, followed by Northern Territory by 3.8 per cent, Queensland by 1.2 per cent, NSW by 0.9 per cent and Western Australia by 0.6 per cent in trend terms.

Nationally, approvals for apartments, or private dwellings excluding houses, rose 30.6 per cent month on month while private house approvals fell 2 per cent.

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