Housing starts keep piling on records as high-rise slide continues

Despite falling approvals of high-rise apartments, Australia’s total residential dwelling approvals continue to grow on an annualised basis. For the year-ended September 2016, approvals were up 0.2% in total, to a new record of 235,179 dwellings, while 4+ Storey apartment approvals were down 0.7% over the same period, at 74,677 approvals.

This is displayed in the following chart.

fig 3

To go straight to the dashboard and take a closer look at the data, click here.

The chart provides some guidance as to the state of the housing market. There is modest softening across the board, with the exception of Semi-detached 2+ Storey dwellings or townhouses if you like. Although coming off a lower base, for the year-ended September, approvals exhibited growth of 22.1%, clearly marking these dwellings out as third-placed, behind free-standing houses and 4+ Storey flats and apartments. The pie chart below provides a sense of the proportions of the national housing stock held by each of these dwelling types for the year-ended September.

Australian Dwelling Approvals by Type: YE September 2016 (%)

fig 4

Unsurprising perhaps, but free-standing houses (50%) rule, followed by the declining 4+ Storey apartment stock (32%), with the fast-moving Semi-detached – 2+ Storey (11%) in an obvious third place.

This is all the more important data, because the growth is not just in 2 Storey but 2+ Storey semi-detached dwellings. They could be, for instance, five stories high, which under other circumstances would place them into the 4+ Storey apartment grouping. But their main defining characteristic is they are Semi-detached. That is, they are genuine town-houses, row houses and mainly in smaller groups, albeit potentially within larger overall developments.

It may be, indeed it seems likely, that many of these dwellings are the awaited ‘urban infill’, where former industrial sites and under-utilised land is being transformed to medium-density housing, where the term semi-detached seems entirely apt. If that is what is occurring, this sector is developing strongly, even as the total housing market comes off its peaks.

Leaving aside the national data on approvals by type, on a state-by-state basis, approvals in New South Wales were up 12.0% for the year-ended September 2016, totalling 75,482 approvals. By contrast, approvals in Victoria totalled 68,640 dwellings and were down 1.4% over the same period.

We can see this in the chart below.

fig 5

To go straight to the dashboard and take a closer look at the data, click here.

As the chart demonstrates, two states, in addition to New South Wales, have shown growth in housing approvals over the year-ended September. Approvals in Queensland totalled 49,846 units for the year (up 2.2%) and those in South Australia reached 11,922 units, up 7.6% over the same period.

Battered by the end of the mining construction boom and the coincidental softening of resources demand, Western Australia’s approvals tumbled to 22,652 units (down 27.2%), proving that the national data includes many ups and downs and is rarely if ever uniform across the nation.