National multi-unit approvals increased by 36 per cent in the three months to May 2021 to be 25.7 per cent higher than last year.&nbsp;

It was the strongest quarterly result for apartment approvals since 2018, stated HIA economist, Angela Lillicrap.

They were driven by a rise in apartment approvals in Queensland and Western Australia.

<img alt="" height="855" src="https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/approvals_broad.jpg" width="1200" />

Matthew Hassan, the Westpac economist noted high rise approvals, where up 186 percent year on year in Queensland and 105 percent in WA.&nbsp;

In NSW highrise approvals were up 59 percent year on year based on the quarterly data, while it was 42 percent in Victoria.

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Hassan noted that high rise approvals were greater than low rise apartment approvals.

NSW lead the low to mid rise apartment growth, up 69 percent, followed by Victoria up 8 percent and Queensland by 4 percent.&nbsp;

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Meanwhile detached building approvals fell back in May from the record level set in April but remain elevated according to the Australian Bureau of Statistics release.

Approvals for private sector houses fell across all mainland states: Western Australia (-18%), South Australia (-16.9%), Queensland (-13.8%), Victoria (-5.8%) and New South Wales (-4.6%), in seasonally adjusted terms. 
&nbsp; 
Detached approvals will remain elevated for several more months as approval authorities work through the remaining HomeBuilder projects, stated HIA economist, Angela Lillicrap.

Ryan Felsman, the senior economist at CommSec, noted council approvals to build new homes fell by 7.1 per cent in May after falling by 5.7 per cent in April.&nbsp;

&quot;But approvals are still up 52.7 per cent on the year &ndash; the strongest annual growth rate in 11 years,&quot; Felsman advised.

In May, total house approvals fell by 10.3 per cent (up 53.6 per cent on the year) with apartments up 0.7 per cent (up 51.0 per cent on the year).&nbsp;

Over the past year, 144,827 new houses were approved &ndash; the most for a 12-month period in over 37 years.

AMP Capital cheif economist Shane Oliver noted the decline in building approvals from their peak likely reflects the end of the HomeBuilder subsidy at the end of March, which brought approvals forward.&nbsp;

&quot;However, approvals remain very high, the AIG&rsquo;s June Construction PMI survey continues to point to strong new orders for new houses and the lagged impact of the surge in approvals up until recently points to a significant further rise in dwelling construction activity over the remainder of this year.

&quot;This is good news for continuing economic and jobs recovery.&nbsp;

&quot;Continuing strength in home building against the back drop of the collapse in population growth also holds out the prospect that the property market will move into a situation of underlying oversupply in the next year or so which should ultimately slow the gains in home prices and help improve affordability,&quot; Oliver said.

Multi-unit approvals increased by 36 per cent in the three months to May 2021, the strongest quarterly result since 2018

jchancellor

Apartment approvals see strongest quarterly result since 2018

HIA has announced the appointment of its new national Vice President, Ms Debbie Johnson. Debbie is the second female to be elected to this position.

Debbie is a highly experienced and regarded building designer and builder based in Queensland bringing a strong portfolio of skills to the role having run her business for 35 years and being involved in a diverse range of industry and government boards throughout her career.

Debbie was appointed as the Queensland Regional President in 2013 and to the National Board in 2017.&nbsp;

Debbie was integral in the establishment of HIA&rsquo;s Building Women awards in Queensland which will celebrate their 7th annual event later this year. She supported the expansion of the program nationally and has shared her career journey speaking at many regional Building Women events over the last five years.

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Ms Johnson has expressed her desire to carry on the good work of her predecessors and represent the HIA core values.

&ldquo;I am proud to be a HIA member and will always promote the Housing Industry Association at every level,&quot;&nbsp;said Ms Johnson.

&ldquo;I want Australians to have confidence in our industry, in the products and materials we use and the homes we deliver every day for thousands of families. The industry is proud of our knowledge, experience and our skills and the Association will continue to work hard to develop the next generation of building professionals,&rdquo; she concluded.

HIA has announced the appointment of its new national Vice President, Ms Debbie Johnson

jordan_55689

HIA appoint new national Vice President

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New Home Sales were 39.4 per cent higher in the March 2021 quarter than the same time the previous year.

The HIA New Home Sales report – a monthly survey of the largest volume home builders in the five largest states – is a leading indicator of future detached home construction.

“HomeBuilder, combined with low interest rates, changing population dynamics and improving market confidence, led to strong sales through to the end of 2020,” stated HIA’s Economist, Angela Lillicrap.

“In December 2020, there was a near record volume of new home sales as households rushed to finalise contracts to build a new home before the end of the $25,000 grant."

“This same effect can be seen in March as households rushed to get access to the $15,000 grant."

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Over the year to March 2021, sales increased by 42.6 per cent compared to the previous year. This indicates a strong level of building activity will occur in 2021 and into 2022, providing employment to the construction sector and supporting the broader economy.

HomeBuilder has brought forward demand for new homes. As a consequence, sales over the coming months are expected to cool from recent highs.

“Demographic shifts in population towards regional areas will continue to drive demand for new detached homes. Strong house price growth recently has also sparked FOMO in buyers which will also support the industry,” concluded Ms Lillicrap.

Sales in the March 2021 quarter increased across all the five largest jurisdictions compared to the same time the previous year. South Australia was up by 90.6 per cent, followed by Queensland (+54.9 per cent) and Victoria (+41.9 per cent). New South Wales increased by 24.7 per cent and Western Australia is up by 15.2 per cent over the same period.
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New Home Sales were 39.4 per cent higher in the March 2021 quarter than the same time the previous year.

New home sales spike during March

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New home sales fell in January 2021. They were 12 per cent lower than at January last year, according to the HIA’s chief economist, Tim Reardon who expected a decline given the winding back of the HomeBuilder program on December 31.

The HIA New Home Sales report – a monthly survey of the largest volume home builders in the five largest states – is a leading indicator of future detached home construction.

“New Home Sales reached remarkable heights in the December 2020 quarter, almost 100 per cent higher than at the same time the previous year,” Reardon noted.

The surge in sales at the end of 2020 can be attributed to HomeBuilder as households finalised contracts to access the $25,000 grant.

“As a consequence of HomeBuilder drawing forward sales in December, new home sales in January 2021 were just 30 percent per cent of the number of sales achieved in December 2020.

“This is still an encouraging result given the nature of the market in January, which is typically a slow month for sales. 

“After drawing forward sales into December, HomeBuilder will also push sales back until the end of March when the reduced $15,000 grant ends,” he added.

Sales are expected to remain flat in February before another surge in March.
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The surge in sales at the end of 2020 can be attributed to HomeBuilder as households finalised contracts to access the $25,000 grant

New home sales fall in January

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GUEST OBSERVER
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NSW First Home Buyer (FHB) assistance measures have not kept pace with the market.
First home buyers represent only 8 percent of owner- occupier home loans in NSW, compared to 15 percent in Victoria and 16 percent in Queensland.
The overall package for first home buyers in NSW has had a consistent and critical flaw for some time. That is that the stamp duty exemptions for FHB’s (via the First Home - New Home package) have not worked in tandem with the First Home Owners Grant.
A full stamp duty exemption should be offered for new properties up to the same monetary cap as the First Home Owners Grant of $750,000 and on vacant land up to $450,000. Currently, a full stamp duty exemption is only available on new properties up to $550,000 and vacant land up to $ 350,000.
I doubt any first home buyers are able to meet the criteria for a stamp duty concession virtually anywhere in Sydney. The stamp duty price caps were put in place in 2012 and prices in Sydney have increased by more than 50 percent in that time.
This is way out of touch with the reality of today’s market.
The overall support to first home buyers would be far more successful if these simple changes were made as soon as possible.
First Home Buyers in NSW are struggling to get a foothold in the market and reinstating the $15,000 grant for new dwellings up to $750,000 and providing a stamp duty exemption to the same amount could provide a saving of up to $34,000 up front.
Whilst longer term structural change is needed to deal with inefficient taxes like stamp duty, such change is unlikely to come anytime soon. That’s why we need to support those struggling to enter the market in the near to medium term.
David Bare is HIA executive director, NSW, and can be contacted <a href="https://hia.com.au/about/Contact.aspx?contactustab=Media" target="_blank">here</a>.
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jchancellor-FAypfDUnLy

NSW government needs to make first home buyers assistance effective: David Bare

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GUEST OBSERVER
The Housing Industry Association, the voice of Australia’s residential building industry supports the Turnbull Government’s focus on first home buyer access and reducing the costs of new housing supply.
Housing affordability is a dominant policy issue in 2017, but it is also a complex one.
A suite of policies to address low housing affordability is required and these policies need to come from the Federal government, state governments, and from cooperation between the two levels.
Changes to negative gearing (and capital gains tax) are not the appropriate policy focus to addressing Australia’s housing affordability challenge. Reducing the cost of new housing supply and tackling the deposit gap faced by aspiring first home buyers is the appropriate core focus.
In this regard a ‘bond aggregator’ model to increase public and social housing supply is a good start. Consideration of allowing first home buyers to access super savings to support a housing deposit is another policy worthy of debate.
A well-designed housing infrastructure fund must also be part of the Federal government’s consideration. A Federal government-backed policy to reduce the price of non-essential infrastructure currently being paid for by new home buyers would play a crucial role in reducing the cost of new housing supply. 
Independent research conducted for HIA by Independent Economics, using the same model as that used by Commonwealth Treasury, provides compelling evidence that amending negative gearing provisions would be a retrograde step as it would reduce both Australian living standards and housing affordability.
In an ‘ideal’ world the two keys to fully addressing Australia’s housing affordability challenge are boosting residential land supply and eliminating stamp duty on residential property conveyances.
Both represent large policy challenges, and can be achieved with cooperation between state governments and the Federal government.
The Henry Tax Review ‘blueprint’ correctly recognised that reforms to housing supply and housing assistance need to come before everything else. Consideration of any policies to amend negative gearing or capital gains tax concessions forget this important finding, provide false hope to aspiring home buyers, and will lead to a deterioration in housing affordability. 
Kristin Brookfield is the Chief Executive Industry Policy at the Housing Industry Association (HIA). You can contact her <a href="https://hia.com.au/IndustryPolicy/PolicyTeam.aspx" target="_blank">here</a>.
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HIA supports housing policy focus from federal government: Kristin Brookfield

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EXPERT INSIGHT

In less than a year, the Australian Capital Territory managed to overtake Victoria, New South Wales, Queensland, South Australia and Tasmania to take out top spot in HIA’s Housing Scorecard Report.

The HIA Housing Scorecard report presents analysis which ranks each of the eight states and territories based on the performance of 13 key residential building indicators, including detached and multi-unit building activity, renovations, housing finance, and rates of overseas and interstate migration.

The Australian Capital Territory has benefited from steady population growth and a stable labour market when compared to other jurisdictions. This has supported strong demand for new homes and renovation activity, which has been boosted by the HomeBuilder program. Activity in the first home buyer sector has also grown strongly. 

This is the first time since 2014 that the nation’s capital has topped the Housing Scorecard.

Victoria’s incredible run of housing market success came to an end in 2020. 

Victoria consistently ranked in the top two spots from late 2015 to mid-2020. The COVID recession has seen the state slide from first place into sixth in just six months. This fall is due to a contraction in most of the thirteen indicators. 

New South Wales has also fallen to its lowest Scorecard ranking since 2012. New South Wales now has just one indicator, multi-unit commencements, remaining in the top two of the nation.

Tasmania, Queensland and South Australia have remained near the top of the rankings, in second, third and fourth position respectively. These states have endured the challenges of the COVID recession with greater resilience than Victoria and New South Wales.

Tasmania’s economy had valuable momentum heading into the COVID recession, underpinned by a substantial volume of home building. Ongoing state government support for home building, including social housing projects, will provide support for the state’s labour market.

In 2020, South Australia recorded its first quarter of positive net interstate migration flow since 2002. Many of these new residents are quickly putting down roots which has provided a significant boost in demand for new detached dwellings.

Queensland, which already had the strongest renovations sector in the nation, has seen a further surge in renovations approvals. The south eastern corner of the state has continued to attract interstate migration from Sydney and Melbourne which partially offset the loss of overseas migration.

The second last ranking for Western Australia hides the remarkable surge in activity since mid-2020. The extent of the recovery is only just starting to emerge in official data. An improving economic outlook for WA, the federal government’s HomeBuilder program and the state government’s support package for residential building has seen owner occupiers and investors return to the market.

The economic disruption in 2020 reshuffled the Housing Scorecard rankings.  
The relative strength of residential building activity across the states and territories will be heavily influenced by the take-up of HomeBuilder and other stimulus measures in 2021.

Thomas Devitt is an HIA economist
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ACT has topped the nation in HIA's Housing Scorecard: Thomas Devitt

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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). 
 
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Multi-unit approvals increased by 14.4 per cent in the December 2020 quarter

Multi-apartment approvals jump in December quarter

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EXPERT OBSERVER
Changes to visas for skilled workers have delivered an immediate hit to Australia’s population growth.
ABS data released today shows that Australia’s annualised population growth rate slowed for the fourth consecutive quarter.
Australia’s overseas migration fell by 9 per cent since changes to visa requirements came into force in April 2017, slowing the population growth rate to 1.6 per cent.
In April 2017, Australia introduced a range of visa changes which have been successful in reducing the number of skilled migrants arriving in Australia.
The current phase of Australia’s 28 years of continuous economic growth is built upon the arrival of skilled migrants. Skilled migration is necessary to offset the impact of our aging population.
Looking domestically, states such as New South Wales and Victoria that have benefited the most from overseas migration over recent years are now seeing population growth rates slowing.
The slowing rate of population growth, while it remains high for a developed economy, will contribute to slower growth of household consumption.
This means slower growth in sectors such as retail and residential building.
Given that these two sectors are amongst the nation’s largest employers the risks presented a decline in population growth should not be underestimated.
Over the year to March 2018, Victoria saw the strongest growth in population (+2.2 per cent), followed by the ACT (+2.1 per cent) and Queensland (+1.7 per cent).
New South Wales was fourth fastest (+1.6 per cent) with Tasmania fifth (+1.0 per cent), Western Australia sixth (+0.8 per cent) and South Australia seventh (+0.7 per cent).
The population of the Northern Territory has actually declined over the last two quarters and the annual rate of growth has slowed to 0.1 per cent.
<img src="https://www.urban.com.au/images/2018/9/20/HIA%20ground.JPG" alt="">
Geordan Murray is the Principal Economist for HIA 
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j.ballantyne1990-6AQqhLzZaK

Overseas migration into Australia is down by 9 per cent: Geordan Murray

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EXPERT OBSERVER
With home prices falling, access to finance more difficult and fewer people now entering the country, the number of new homes approved for construction has declined.
ABS data released today show that 16,447 homes (seasonally adjusted) were approved for construction in August – a level that is 9.4 per cent lower than in July and 13.6 per cent lower than in August 2017. The latest level of approvals is the lowest since October 2016. 
The new home building sector has been cooling modestly over the past year after reaching all-time high levels of activity during 2015 through to 2017.
Just as apartment construction drove the increase in home building to record levels, approvals data is signalling that apartments will lead the decline.
Approvals for units fell by 17.2 per cent in August, to be 23.7 per cent lower than a year earlier. 
The key risks that we’re watching relate to credit conditions and population growth.
Constraints on the availability of finance through APRA and increased prudential constraints by banks are restricting investment in new homes.
Population growth has slowed since the government introduced stricter visa requirements last year. As global economic conditions improve, skilled migrants who might otherwise consider immigrating to Australia could be more inclined to look to other similar advanced economies where entry requirements are less restrictive.
The outlook for detached house building is better than for units, with the latest approvals data indicating declines likely to be much more modest,” added Ms Hopkins.
Detached house approvals declined by 1.7 per cent in August and are a modest 4.2 per cent lower than a year previously,” concluded Ms Hopkins.
Total seasonally adjusted dwelling approvals in August fell across the eastern seaboard states: Victoria (-12.0 per cent); Queensland (-8.4 per cent), and; New South Wales (-2.7 per cent). Tasmania experienced the largest monthly fall (-18.6 per cent). Elsewhere approvals increased: Western Australia (+14.7 per cent) and South Australia (+9.6 per cent). 
In trend terms, total dwelling approvals in August increased by 1.5 per cent in the Northern Territory and was virtually unchanged (up by 0.1 per cent) in the Australian Capital Territory.
Diwa Hopkins is an economist at the Housing Industry Association.
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