Apartment building approvals decline in October: ABS

There was a significant downturn in building approvals during October with approvals dropping 12.9 per cent month on month, and 8.1 per cent year on year.

While detached dwellings recorded a 4.3 per cent monthly increase, the latest Australian Bureau of Statistics building approvals data showed a 37.5 per cent decrease in approvals in the more volatile apartment market.

New South Wales recorded the most severe drop, down 29.4 per cent, the biggest monthly decline in a decade.

By state, the number of dwelling approvals also fell South Australia (-8.1%), Western Australia (-2.7%), Victoria (-2.0%) and Tasmania (-1.8%). Queensland rose (2.2%), in seasonally adjusted terms.

Daniel Rossi, ABS Director of Construction Statistics, also noted the value of non-residential building fell 20.9 per cent, having fallen 10.4 per cent in September.

ANZ senior economist Adelaide Trimbell noted building approvals were “past their peak across all states”.

“The magnitude of the 12.9 per cent drop was driven by a reversion in approvals in New South Wales, though it also reflects an ongoing moderation of approvals from Homebuilder highs nationally,” she said.

“Only Queensland saw a rise in monthly approvals," she said.

Commsec senior economist Ryan Felsman noted the fall was largely driven by a decline in higher-density apartment approvals.

"Council approvals to build new dwellings have declined for six out of the past seven months due to the unwinding of HomeBuilder stimulus-related housing activity and Delta virus lockdown disruptions in Australia’s south-east," he noted.

He noted the total residential building approvals decline of 12.9 per cent in October was the biggest fall since the national lockdown in May 2020. 

"The fall was largely driven by a decline in higher-density apartment approvals, which plunged by 36.1 per cent in October – the biggest fall in almost 4 years – reflecting an unwinding of approvals (down 49.6 per cent) for several large housing projects in Sydney after a surge in consents during September (up 116.8 per cent). 

"This saw overall NSW residential building approvals drop 29.4 per cent, the biggest monthly decline since September 2011."