Dwelling approvals up in May: ABS
Compared to this time last year, building approvals were still 9.8 per cent lower.
ABS head of construction statistics Daniel Rossi said the lift in total dwellings was driven by “the more volatile dwellings excluding house series, which rose 59.4 per cent”.
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“This increase reflected a large number of apartment developments approved in NSW in May,” Mr Rossi added.
“Approvals for private sector houses remain more subdued, rising 0.9 per cent, following a 3 per cent fall in April.”
According to Master Builders Australia, the ABS data revealed a “welcome uplift in higher density home building approvals”, however, warned of “the need for sustained recovery and cautions against unnecessary government-induced cost pressures”.
Master Builders Australia chief economist Shane Garrett said the higher-density home building approvals recorded its strongest monthly total since the end of last year, however, detached housing building approvals “remained flat” during the month and are down 15 per cent on a year ago.
“May’s sharp increase in unit/apartment building approvals is welcome given the severity of shortages in the rental market,” Mr Garrett stated.
“The difficult conditions in the rental market are the result of prolonged underbuilding in the medium/high-density part of the market. This dates from before the pandemic.”
House prices lift as supply dwindles
On the back of this data, CoreLogic’s national Home Value Index (HVI) recorded a fourth consecutive rise in housing values, up by 1.1 per cent in June.
CoreLogic research director Tim Lawless noted the main factor in keeping upwards pressure on housing values was the lack of available housing supply.
Speaking to Mortgage Business, Mr Lawless stated the pace of growth in housing supply has been “surprisingly strong”, particularly in the absence of a typical catalyst for a positive inflection, such as lower interest rates, a rise in credit activity, or some type of fiscal support.
“This strong positive change in values is more reflective of low supply and is occurring on relatively thin volumes that are tracking around the five-year average over the past three months,” Mr Lawless added.