Multi-apartment approvals jump in December quarter

The number of multi-unit approvals increased in four states in the December 2020 quarter.

Multi-unit approvals increased by 14.4 per cent in the December 2020 quarter compared to the preceding quarter but the HIA noted they are 12.6 per cent lower than the same time last year. 

Multi-unit approvals finished the year 8.6 per cent lower than in 2019.

“This relatively strong level of approvals for multi-units is not an indication of the volume of commencements to occur in 2021, as they likely began the planning and approval process prior to COVID,” said HIA economist, Angela Lillicrap.

“There is a divergence in the conditions facing detached builders versus apartment builders,” she advised.

ABS building approvals data for detached houses rose for the sixth consecutive month in December, to reach the largest number since the series began in 1983. Detached house approvals increased in the December 2020 quarter to be 43 per cent higher than at the same time the previous year. Detached approvals finished 13.9 per cent higher for the 2020 calendar year than in 2019.

Lillicrap suggested “not only does the apartment market face headwinds” from a lack of population growth but the regional migration data shows a shift away from metropolitan Sydney and Melbourne.

“The apartment market is also likely to be constrained until overseas migration returns,” said Ms Lillicrap.

The number of multi-unit approvals increased in Western Australia (+73.8 per cent), New South Wales (+15.3 per cent) and Queensland (+5.7 per cent). 

The number of multi-unit approvals declined in Tasmania (-81.8 percent), Victoria (-47.2 per cent) and South Australia (-44.4 per cent).