The Housing Industry Association (HIA), which represents Australia’s residential building industry, reports that residential building approvals have reached record levels in January 2014.
According to HIA Senior Economist Shane Garrett, total dwelling approvals during January rose by 6.8 per cent in seasonally adjusted terms, which provides a continuation of the strong second half performance during 2013.
He points out approvals over the past 12 months have totalled over 182,000, the highest 12-month total since 2004. In the three months to January, approvals were at an annualised level of over 200,000.
Shane Garrett said that these figures indicate the pipeline of residential building work is looking particularly healthy, and predicted that these approvals should translate into a boost in real activity on the ground over the coming months.
During January, total detached house approvals increased by 8.6 per cent, with multi-unit dwelling approvals rising by 4.7 per cent. In seasonally adjusted terms, total dwelling approvals during January numbered 17,514 – the highest for a single month in over eleven years.
Shane Garrett comments that the figures show the housing activity may finally be reaching the kind of levels demanded according to market fundamentals. He explained that Australia, over the past decade, has outshone almost all developed economies in terms of economic growth and population increases, yet structural barriers have largely impeded an adequate response in housing supply. There is a real opportunity now to begin plugging the housing deficit that has opened up over the last decade.
HIA also urges policymakers right across Australia to ensure that planning systems, land supply and infrastructure delivery are streamlined further to ensure the long awaited supply response can continue.
Shane Garrett concludes that the strong result is consistent with the stronger forecasts outlined in the HIA’s latest series of Outlook reports released recently. About 165,600 commencements are expected this year, followed by 168,000 starts in 2015.
During January 2014, growth in seasonally adjusted building approvals was recorded in New South Wales (+5.4 per cent), Victoria (+10.4 per cent), Queensland (+1.2 per cent), South Australia (+10.5 per cent), Western Australia (+5.6 per cent) and Tasmania (+10.5 per cent). Declines in trend levels of dwelling approvals affected the Northern Territory (-28.3 per cent) and the ACT (-2.3 per cent).