Data released by the Australian Bureau of Statistics (ABS) has shown that the number of building approvals and home-building permits rose in March. Approvals to build or renovate houses or apartments saw a 2.80 per cent increase from February to March. Over the period of a year, building approvals saw a 23.6 per cent increase. Permits to build houses rose 1.1 per cent while non-house dwellings, including apartments, rose 5.3 per cent. This subgroup is up almost 60 per cent over the last year. The approvals for the construction for new homes rose to 19,419 in total, the highest on record since data started collection in 1983.
St George chief economist Hans Kunnen said Australians have been showing more interest in apartments and town houses rather than traditional large homes. “While this category tends to be volatile, as a trend, there has been a clear shift towards more higher-density housing in this current upswing," he said. Mr. Kunnen also rationalised why apartment prices lagged behind housing prices. “The surge in residential construction is alleviating some of the supply shortages in parts the country," he said. “The jump in construction activity within multi-unit dwellings can help to explain relatively weaker price growth of late among units in comparison to houses.” Many analysts attributed the rise in housing approvals to the interest rate cut in February. Housing Industry Association senior economist Shane Garret said both lower interest rates and a strong population contributed to the rise in housing approvals. “New home building continues to benefit from the exceptionally low level of interest rates, as well as strong population growth over recent years in the key home buyer age group.”
Author: Imran Valibhoy
May 04, 2015
Since Joining the firm in 2006, Imran has worked on a range of M&A and Capital Market transactions in the natural resources, mining as well as projects in the renewable energy sector. Prior to joining Wise-owl, Imran worked at Euroz Securities in Perth, aiding in the advisory and valuation of companies in the mining and industrial sectors in Australia. Imran has a Masters in Banking & Finance from City University's Class Business School in London and a Bacheloor degree in Commerce from UWA.