Dwelling approvals down, but strength remains houses

In November 28, 2017

For the year-ended September 2017, Australia’s housing approvals declined 11.4%, falling to 211,855 separate dwellings. A year earlier approvals were more than 27,000 dwellings higher.

September approvals totalled 19,844 dwellings, just 0.4% lower than approvals in September 2016, but 1.9% higher than in August. It is important to note that approvals in September 2017 were the highest monthly volume for the year and record the fifth successive month of approvals growth.

Only One-Storey Townhouses (+14.4%) exhibited any growth over the year to the end of September. On an annualized basis, approvals totalled 10,051 separate dwellings, the first time they have been above 10,000 dwellings. However, that growth aside, their contribution is just 4.7% of Australia’s total dwelling approvals for the year.

Their sibling Two + Storey Townhouses recorded a modest 0.2% decline in approvals over the same period, falling to 25,580 separate dwellings, accounting for an ever-growing 12.1% of Australia’s total approvals.

Increasingly irrelevant, Flats of 1 & 2 Storeys (-22.2% and a 1.2% market share) and Flats of 3 Storeys (-13.7% and a 2.2% market share), are fading into obscurity, at least in a statistical sense, if not for those living in them.

It is Flats of 4+ Storeys – constructed in apartment towers in the main – that have experienced the largest decline. Over the year, approvals slumped 30.2%, with the total number of approvals falling to 53,569, down more than 23,000 on the prior year. Their market share has plunged to 25.3%, from 32.1% in the prior year.

There were a few commentators who, at the height of the high-rise boom, suggested apartments would overtake free-standing houses and would surpass them in perpetuity at some point in the relatively near future. That has not occurred, and on the latest data – leave alone what we know of Australia’s dwelling preferences – is not likely anytime soon.

Free-standing dwellings – houses – experienced a small 3.2% decline for the year-ended September 2017. Total approvals reached 115,285 separate dwellings, less than 4,000 approvals lower than for a year earlier. Approvals of houses over the year accounted for 54.4% of total approvals, reinforcing the dominant position of houses in the Australian dwellings market.

Further details are available in Wood Market Edge each month and in the detailed monthly data series that IndustryEdge subscribers receive.

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