Building approvals to construct new homes hit a record high in February, buoyed by low borrowing costs and the federal government’s Homebuilder program due to end this week.
Approvals to build new houses increased by 15.1 per cent last month to a total of 13,939, surpassing the previous record-high set in December, reveals the Australian Bureau of Statistics figures released Tuesday.
Approvals for townhouses and apartments increased by 45.3 per cent, coming off a nine-year low in January.
House building approvals were up nearly 58 per cent year on year, ABS seasonally adjusted figures show.
While dwelling approvals for apartments increased in February, they are down 28.7 per cent year on year.
ABS director of construction statistics Bill Becker said private house approvals had risen by almost 70 per cent since the introduction of the Homebuilder grant mid-last year.
While the HomeBuilder program ends Wednesday, BIS Oxford Economics economist Maree Kilroy expects the post-lull to be shallow.
“The core fundamentals underpinning new housing demand such as ultra-low borrowing costs, preference shifts, elevated household savings and rising property turnover will prevent a sizeable correction for house approvals nationally as we move into fiscal year 2022,” Kilroy said.
CBA economists also anticipate strong growth in renovation activity “over 2021” boosted by low borrowing costs.
Dwellings approved February: ABS
|Feb-21||Monthly change %||Yearly change %|
|Total dwelling units approved||19422||21.6||20.1|
|Private sector houses||13939||15.1||57.5|
|Private sector dwellings excluding houses||5082||45.3||-28.7|
^ ABS building approvals
The number of dwellings approved lifted 21.6 per cent in February, seasonally adjusted, after falling 19.4 per cent in January.
Total dwelling approvals increased in Queensland by 40.5 per cent, Tasmania 31.6 per cent, Victoria 21.7 per cent, Western Australia 19.1 per cent and New South Wales 16.1 per cent. Dwelling approvals fell in South Australia by 3.4 per cent.
Approvals for private sector houses rose across all mainland states in February, up by 25.4 per cent in Queensland, Western Australia 16.7 per cent, New South Wales 14.5 per cent, Victoria 11.1 per cent and South Australia 4 per cent.
The value of non-residential building also increased in February, up 27.5 per cent.
CBA economist Belinda Allen said that non-residential approvals made a welcome rebound providing a brighter outlook for business investment.
“We do expect to see a lift in business investment over the course of 2021 before stronger gains in 2022,” Allen said.
“This should be aided by the recent lift in non‑mining company profits, strong business conditions and capex survey measures as well as the improvements in the underlying economy.
“Uncertainty over Covid-19 and the economic outlook remain the primary near term downside risks to business investment,” Allen said.