Melbourne building permits value sets August record thanks to big-ticket projects

A $130 million permit for a retail and residential development on Spencer Street in the Melbourne CBD helped drive the value of building permits issued in Victoria in August to the highest level for any August on record, according to the state’s Building Commission.

While there were fewer building permits issued in August 2011 than in the same month in 2010 and 2009, they were for bigger commercial and residential projects located close to the city.

More than 8,900 building permits were issued in August 2011 with a combined value of $2.3 billion, compared with about 9,500 issued in August 2010 with a combined value of $1.9 billion and an almost identical result achieved in August 2009.

Value of building permits issued

Source: Victorian Building Commission

Deputy building commissioner Peter Donald says the record value of building permits issued in August was boosted by a significant rise in residential and commercial building activity with a number of very high value building permits issued including the development on Spencer Street.

“The strong August 2011 activity has also contributed to a strong calendar year to date, which is 5% ahead on the levels from last year,” Donald says.

Residential development permits including those for high-rise apartments rose 155% to $480 million while commercial permits jumped 119% to $349 million and retail rose 121% to $141 million. 

City locations accounted for more than three-quarters of the building permits issued, with Melbourne’s metropolitan regions registering an increase of 27% to $1.8 billion in the value of building permits issued in August 2011 when compared with the same month last year. Rural Victoria registered an increase of 5% to $432 million.

Nearly half of all building permits ($1.1 billion) were issued in the inner suburbs of Melbourne, which rose by 54.6%, while the north central (up 13% to $84 million), north west (up 30% to $73 million) and south west (up 28% to $432 million) regions all registered strong increases in building commitments.

The biggest drop in building permit activity occurred in Gippsland, with the value of permits falling 33% to $68 million.

The figures highlighted the downturn in the construction of new houses in the state with domestic housing permits falling 8% to $1.1 billion in August.

Public Buildings was the other sector to register a fall, with the value of permits down 34% to $160 million in August.

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Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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