DIYs contribute to Victoria's domestic building permits decline

Jonathan ChancellorOctober 29, 2012

The outer-Melbourne region made up the majority of the Victoria's domestic building permits decline, according to the Victorian Building Commission.

The value of domestic building permits issued in outer Melbourne decreased by 17% to $5 billion in 2011-12, and the number issued fell by 15% to 32,914 building permits. Declines in domestic building permits issued in the inner-Melbourne region also contributed to the total decrease. In 2011-12, the value of domestic building permits issued in inner Melbourne fell 4% to $3.5 billion and the number issued fell by 8% to 19,585.

There were 81,089 building permits worth $11.8 billion issued for domestic building work in 2011-12 across Victoria.

Both the value and number of permits declined 10% compared to 2010-11. The number of building permits issued was the lowest since 2000-01. Even domestic owner-builder work activity declined being 8% less than 2010-11.

These permits totalled $1.4 billion worth of building work, 6% lower when compared to 2010-11.

Most of the permits issued were building permits for new buildings ($977.2 million), and extensions and alterations ($373.3 million). This level of domestic owner-builder building permits equated to 27% of all domestic building permits and 12%of the value.

While much of Victoria recorded declines in the number and value the north-west region recorded an increase in the value of permits issued for domestic building permits.

Municipalities in this region are: Ararat, Ballarat, Central Goldfields, Hepburn, Hindmarsh, Horsham, Mildura, Moorabool, Northern Grampians, Pyrenees, West Wimmera and Yarriambiack. The south-west and the north central regions were stable. The total value of domestic building permits consisted of 83% new buildings and 15% extensions and alterations.

The remaining 2% involved demolitions, re-erections and other building permits. The overall decrease in the number and value of domestic building permits issued was largely due to decreases in new building work. The value of domestic new building permits fell 13% to $9.8 billion in 2011-12, while extensions and alterations increased 5% in value to $1.8 billion.

The biggest decline in domestic building permits over 2011-12 was experienced in the $100,000 to $200,000 value range, falling 20% in both number and value of permits issued. Permits valued between $25,000 and $100,000 fell 10% in both number and value, those valued over $200,000 recorded a 9% fall in number issued and an 8% fall in their overall value, and permits valued at less than $25,000 fell by 6% in number and 4% in value.

The Victorian Building Commission defines domestic buildings as one or more buildings that in association constitute:  a single dwelling, being  (i) a detached house; or (ii) one or more attached dwellings, each being a building, separated by a fire-resisting wall, including a row house, terrace house, town house or villa unit, which is not located above or below another dwelling or class of building other than a private garage. A non-habitable building being a private garage, carport, shed or the like. (BCA Class 1, 1a or 10a)

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Jonathan Chancellor

Jonathan Chancellor is one of Australia's most respected property journalists, having been at the top of the game since the early 1980s. Jonathan co-founded the property industry website Property Observer and has written for national and international publications.

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