Australia Approves Record Number Of House Builds
News Posted On: 19 September 2014
But the figures are uneven across the states. After a dip, new home approvals resurged in July and remain at very high levels, according to the latest figures from the Australian Bureau of Statistics (ABS).
In July this year, a total of 16,320 dwellings received approval, a 2.5% increase on the previous month, and compared to the previous quarter. In the 12 months to July, total home approvals reached 195,227.
Unusually, the major driver in building approvals increases was Western Australia, the country’s most remote province. That remoteness is both from the rest of the world – it’s the part of Australia furthest away from Asia and New Guinea – but also, more crucially, from Sydney. In a familiar pattern, the last few years have seen Sydney’s home prices race ahead while prices elsewhere in Australia have slowed or stalled, their fortunes depending on how near to Sydney they are.
In July, home approvals leapt by 23.1% in Western Australia in seasonally adjusted terms. In Queensland, approvals rose by a mere 0.9% and other states actually saw falls, including Tasmania, where approvals fell by 7.7%, and New South Wales, where they fell by 5.7%. Victoria saw a 4.6% decline, and South Australia witnessed a smaller slide of just 1.9%. The Northern Territory saw home approvals rise by 16.7% while they fell 9.3% in the Australian Capital Territory, which is the home of national capital Canberra and a bare 100 miles from Sydney.
Speaking for the Housing Industry Association (HIA), Australia’s builder’s and realtor’s organization, Shane Garrett, said, ‘these figures mean that Australia’s home building industry has broken yet another record this year. Total seasonally adjusted new home approvals over the past 12 months are the highest since records began back in 1984.’ Mr. Garrett, HIA’s chief economist, went on to observe that, ‘having broken through the 195,000 threshold for the first time, new home building approvals are now at an even higher level than during the 1994 building boom.’
However, the uneven spread of advances across the nation prompted Mr. Garret to point out that home approvals had actually slowed somewhat overall in the 6 months leading up to July 2014, and that the majority of the July increase was driven by ‘an exceptionally large expansion in Western Australia.’
While any improvement in the housing market is good news, Sydney remains the heart of Australia’s economy and thus of its housing market. ‘The key,’ Mr. Garrett expands, ‘ is to ensure that a number of markets, like Sydney for example, achieve sustainably healthy levels of new home [approvals] over the coming decade which far outweigh what has been built over the last ten years.’
Other ABS figures show residential building work continued to improve in the June 2014 quarter, following healthy growth in March. Residential building work in this period was worth AU$13.4bn, up 2.2% on the previous quarter and up 9.6% on the June 2013 quarter. In the June 2014 quarter, new building work represented 1.6 points of the 2.2% increase in overall building work, meaning in terms of dollar amount there was more construction than improvement or repair.
‘These preliminary figures indicate that new home building activity is likely to represent a positive contribution to overall GDP growth in the national accounts figures to be released next Wednesday,’ said HIA economist Diwa Hopkins.
Australia’s profoundly geographically unequal housing market may be finding a more even keel at last.
Written by Les Calvert
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