Capital cities driving medium density approvals: Bankwest

Capital cities driving medium density approvals: Bankwest
Jessie RichardsonDecember 7, 2020

Capital city first home buyers are boosting approvals for townhouses, units and semi-detached homes, according to Bankwest.

Bankwest's Housing Density Report showed that while medium density housing approvals as a proportion of total dwelling approvals was down slightly in the past year – 43% in 2014, compared to 44% in 2013 – approvals for the homes are trending upwards and approaching record levels. In the 12 months to November 2014, 85,323 medium density homes were approved.

In New South Wales, the Northern Territory and the Australian Capital Territory, townhouse, unit and semi-detached homes made up the majority of approvals in the year to November 2014. In Western Australia, less than 25% of housing approvals were for medium density homes.

The category's approvals overtook house approvals in 30.4% of all Australian local government areas in that time.

Unsurprisingly, the growth in medium density housing was concentrated in capital cities. Bankwest executive general manager of Retail, Andrew Whitechurch, said last year almost nine out of 10 approvals for medium density dwellings were in capital cities.

"This is a marked increase from 2011, when the Census revealed capital cities accounted for only 76% of all medium density dwellings," said Whitechurch.

According to Bankwest's report, 88.2% of medium density approvals were for capital city homes. The concentration around capital cities was most pronounced in South Australia, Victoria and Western Australia.

"The number of medium density housing approvals has increased in five out of the eight capital cities in the 12 months to November last year," Whitechurch said.

"Perth experienced the largest increase, with approvals growing by 43.7%.

"Brisbane and Melbourne also saw double digit increases (23.1% and 18.9% respectively), followed by Adelaide (8.9%). Approval figures in Sydney have remained stable with a 0.4% increase."

Considering medium density housing as a proportion of total approvals, Brisbane is seeing the quickest escalation in housing density of any capital city. There, the proportion of medium density housing approvals increased by 33.7 percentage points between 2011 and 2014. Bankwest attributes Greater Brisbane's share of medium density approvals in part to apartments, townhouses and units in the Gold Coast and Sunshine Coast.

Canberra saw the second highest increase in medium density housing as a proportion of total approvals, with a 27.7 percentage point increase in the three year period. The increase has been in part due to the ACT's Tuggeranong, where housing density is increasing faster than in any other local area (as defined by the Australian Bureau of Statistics). Between 2011 and 2014, the proportion of medium density approvals has jumped 64.2 percentage points, to 79%.

While almost all the capital cities saw an increase in the proportion of medium density approvals, Hobart bucked the trend, with the proportion of medium density housing decreasing by 8.6 percentage points in the same period.

Whitechurch said first home buyers are likely to be driving the demand for medium density housing as they seek out more affordable housing options.

"Bankwest's First Time Buyer Deposit Report, released in December last year, showed that  units are considerably more affordable, taking the average first time buyer couple 3.3 years to save a 20% deposit on a median-priced unit in an Australian capital city compared to 4.1 years to save for a stand-alone home," he said.

He also cited population growth as a key driver for medium density housing supply.

"Increasing competition for housing and higher prices will no doubt lead to further growth in medium density housing approvals in the future," said Whitechurch.

"Despite this ever-emerging trend, the growth in approvals for stand-alone houses outpaced medium density home approvals in the year to November 2014 (14.9% growth compared to 10.2% growth)."

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