Apartment approvals see strongest quarterly result since 2018
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.
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.
Matthew Hassan, the Westpac economist noted high rise approvals, where up 186 percent year on year in Queensland and 105 percent in WA.
In NSW highrise approvals were up 59 percent year on year based on the quarterly data, while it was 42 percent in Victoria.
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.
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.
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.
"But approvals are still up 52.7 per cent on the year – the strongest annual growth rate in 11 years," 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).
Over the past year, 144,827 new houses were approved – 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.
"However, approvals remain very high, the AIG’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.
"This is good news for continuing economic and jobs recovery.
"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," Oliver said.
