Building approvals softer in December, but overall strength celebrated
The December 2013 building approvals figures released by the Australian Bureau of Statistics (ABS) have met with mixed responses, however the Housing Industry Association (HIA) says that despite the monthly softness the overall year was strong.
Over the December month, residential building approvals fell by 2.9% compared to November, explained HIA senior economist Shane Garrett.
However, he said that the level of building approvals is high – having increased by 15.7% overall for the 2013 year, being the first year of significant expansion since 2010.
“The number of detached house approvals fell by 3.2 per cent in December with multi-unit approvals slipping by 2.5 per cent,” Garrett said.
Approvals fell in all states apart from New South Wales, which Garrett noted is a concern.
“We are conscious that supply side conditions could suppress the current recovery, and December’s figures may partly reflect this difficulty,” he warned, pointing to difficulties with land release, development and infrastructure funding.
These were issues brought up in a number of submissions to the Senate inquiry into affordable housing.
With 3.8% growth in New South Wales for the month, the total seasonally adjusted building approvals saw declines in every other state and territory. South Australia was down the most, by 13.7%. Tasmania, Victoria and Queensland were subdued at 5.5%, 5.1% and 4.9% respectively.
Meanwhile, Western Australia was down 3.6%.
In trend terms, dwellings approvals fell in the Northern Territory by 15.8%, and in the ACT by 2.5%.
In trend terms, Queensland, South Australia, Victoria and Western Australia all moderately increased. New South Wales remained unchanged.
Despite this, Northern Territory treasurer Dave Tollner was happy with the overall yearly increases, pointing to the 19.9% increase over 2013.
“This was primarily driven by a 21.1 per cent increase in the number of unit and townhouse approvals, up from 1,140 in 2,012 to 1,381 last year,” Tollner said.
He pointed to a large number of multi-unit developments in and around Darwin’s CBD and Palmerston as helping drive this increase.
House approvals were also supported by land releases in the new Darwin and Palmerston suburbs Muirhead, Bellamack, Johnston, Zuccoli and the Coolalinga subdivision.
The Urban Taskforce is similarly positive about New South Wales growth, particularly in high density apartments and non-residential building across the state.
“Apartment approvals continue to move solidly upwards in NSW,” said Urban Taskforce CEO Chris Johnson.
“This Indicates a continual shift towards urban living fuelled by low interest rates and off shore investments.”
He pointed to a number of sizable projects that are going through the planning system currently, and will lead to construction over a number of years. He said that Sydney’s big jumps in prices lately have only come from a supply shortage
“The current stalemate in the planning reform process with the opposition parties undermining a well-balanced reform package is likely to reduce confidence. The anti-development attitude of some of the opposition parties will only build up a negative attitude within the community against change to accommodate future growth,” he said.