After tracking the latest data from the Australian Bureau of Statistics, HIA Economics released an updated analysis of building approvals by region and type in order to investigate the implications for new home construction in 2017.
Their research unveiled the following key findings:
ABS Building Approvals for Australia peaked back in October 2015. As we have frequently highlighted, approvals have subsequently held up at what are extremely high levels by historical standards.
Cyclical decline in building approvals has been modest to date. Total seasonally adjusted building approvals were only 3.8 per cent lower in 2016 than in 2015.
While building approvals peaked in late-2015, total building approvals could still be over 200,000 in 2017.
Three out of eight states and territories recorded increases in total building approvals in 2016: the Australian Capital Territory; South Australia; and New South Wales.
As the down cycle in building approvals intensifies, ‘High density’ dwellings are expected to carry the burden of the deceleration. Detached and semi-detached dwellings are likely to fare better in a relative sense.
Approvals for semi-detached, row or terrace houses/townhouses performed strongly in 2016, with the Australian Capital Territory, Queensland and Victoria being key markets for this form of housing. This is a segment of the new home building market to keep an eye on in 2017.
The proportion of detached house approvals compared to multi-unit approvals was 51.2 per cent in 2016, a slight reversal on the previous majority share held by multi-units.
Overall, we retain our long held outlook for continued healthy levels of new home construction in 2016/17, and to a lesser extent in calendar year 2017.
detached houses (-5.8 per cent)
semi-detached, row, terrace or townhouse homes (-10.1 per cent)
flats or units in 1 or 2 storey buildings (-21.9 per cent)
flats or units in 3 storey buildings (-25.8 per cent)
and flats or units in 4 or more storey buildings (-27.4 per cent)
"In the last calendar year, all categories except semi-detached, row or terrace dwellings posted a negative change. Building approvals in the ‘semi-detached’ category increased by 3.8 per cent in 2016."The remaining categories posted declines in 2016:
detached houses (-1.9 per cent)
flats or units in 1 or 2 storey buildings (-27.1 per cent)
flats or units in 3 storey buildings (-7.7 per cent)
and flats or units in 4 or more storey buildings (-7.5 per cent)
