In January of this year, the 17,412 dwellings approved for construction was 19.1% lower than the peak of 21,519 approvals in October 2015. CoreLogic notes that despite approvals being substantially lower than their recent peak, they remain high in a historical context.
In January, 8,989 houses were approved for construction and 8,422 units were approved. Over recent months, it has been the unit segment that has been dragging approvals lower. However, in January, the houses approved for construction was the lowest number of house approvals since October 2013. In January, house approvals dropped -2.2%, while unit approvals rose by 6.6%. Year-on-year house approvals were -8.7% lower and unit approvals were -15.4% lower.
“It has now been five months since there has been more units approved for construction than houses highlighting the substantial recent slowdown in unit approvals,” said Cameron Kusher, head of research at CoreLogic RP Data.
Over recent months, there has been a substantial pull-back in high-rise and townhouse approvals. High-rise approvals (which are defined as anything four storeys or larger) peaked at 8,569 approvals in July 2016, and the 4,721 approvals in January were -44.9% lower than volumes at the peak. In January of this year, 24.4% of unit approvals were for townhouses, 6% was for low-rise units, and 69.6% were for high-rise units.
“Looking at approvals across the capital cities, we have used a rolling three month average to smooth out some of the monthly volatility in approvals,” said Kusher. “The trend is pretty clear that house approvals are trending lower, particularly so across the larger capital cities.”
Compared to volumes a year ago, approvals are lower in the following capitals: Sydney (-6.6%), Brisbane (-3.8%), Adelaide (-2.7%), Perth (-16.8%), and Darwin (-28.7%). They were higher in Melbourne (+6.4%), Hobart (+23.2%), and Canberra (+8.4%).
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