Nation’s Apartment Approvals Crash to 11-Year Low

A fall in apartment approvals nudging 25 per cent across February has driven the annual approval rate to a 11-year low.

New data from by the Australian Bureau of Statistics (ABS) revealed home approvals fell 1.9 per cent across February (seasonally adjusted), after a 2.5 per cent fall in January.

ABS head of construction statistics Daniel Rossi said approvals for private sector homes excluding houses fell 24.9 per cent in February, driven by a fall in the number of approved large apartment projects.

He said approvals for private houses rose 10.7 per cent for the month.

Approvals for private sector houses rose in all states: Western Australia (20.7 per cent),  New South Wales (17 per cent), Victoria (12.4 per cent), Queensland (3.4 per cent), and South Australia (2 per cent).

Queensland’s total dwelling approvals across February were a train wreck, crashing 28.5 per cent.

Everywhere else, total approvals rose—Tasmania (up 39.3 per cent), New South Wales (23.4 per cent), South Australia (15.4 per cent), Victoria (2.1 per cent), and Western Australia (0.9 per cent).

Oxford Economics head of Property & Building Forecasting Timothy said the data revealed total home approvals were running at 163,099 year-on-year (original terms), a level well below Australia’s underlying home requirement.

In fact, it is the lowest level since March, 2013.

Home approved, states and territories, seasonally adjusted

▲ Source: ABS

Hibbert said Australia has a significant stock deficiency, which is set to grow further in coming years.

“Beyond the approval stage, construction timeframes remain extended and will slow the addition of new projects to the housing stock,” Hibbert said.

But, Hibbert said, leads had brightened, especially for houses.

“Development enquiries, land sales, and construction finance data points suggest a turning point in the coming months,” Hibbert said.

The value of total building approved fell 16.5 per cent after a 14.5 per cent rise in January.

The value of total residential building fell 16.8 per cent, comprised of a 19.1 per cent decrease in the value of new residential building and a 0.1 per cent fall in alterations and additions.

The value of non-residential building fell 16 per cent, after a 11.6 per cent rise in January.

Urban Taskforce chief executive Tom Forrest, said that “everyone now agrees there is a supply crisis, and everyone says they are on board with the need for more housing supply to fix the crisis, but the numbers show that the pipeline of housing supply is dry”.

“With less than 100 days until the start of the National Housing Accord, which kicks in on July 1, ABS housing approvals data ... show no sign of improvement and should act as a wake-up call to the Albanese Government to allocate billions in next month’s budget to housing-enabling water and roads infrastructure,” Forrest said.