A surge in the apartment sector in Melbourne has seen building approvals throughout Australia hit record highs as the boom in housing construction shows no sign of abating.
On a seasonally adjusted basis, the number of new houses and apartments approved for construction jumped by 7.5 percent to come in at a record high of 18,245 – a figure which if sustained over a twelve month period would imply an annual build rate (assuming all homes approved do proceed to construction) of more than 218,000 new dwellings in a nation which has built more than 180,000 homes in a calendar year only once in the past 30 years.
Compared with the previous corresponding period at the depth of the most recent trough in 2012, approvals for new dwellings over the six months to November were up by almost one quarter.
Victoria led the way as a 38 percent surge in multi-residential approvals from an already high base saw overall approval numbers (seasonally adjusted) jump by almost 20 percent in that state.
Having defied expectations of a pull-back in activity amid significant volumes of new stock hitting the market following high levels of building activity in recent years, the state’s capital of Melbourne is experiencing a boom in apartment building that shows no sign of abating.
Last month, for instance, Central Equity appointed Brookfield Multiplex to build its $135 million Australis Melbourne Apartments tower including 46 storeys of one, two and three bedrooms encased by a glass façade on Little Lonsdale Street.
In November, meanwhile, Lend Lease submitted plans for a massive $600 million waterside complex featuring 1,070 apartments in two towers at Docklands on a strip of land between Collins Street and the Yarra River.
Outside of Victoria, approvals also rose by 8.2 percent, 5.7 percent and 1.2 percent in Tasmania, Queensland and Western Australia but dropped 1.4 percent in New South Wales and 16.3 percent in Tasmania.
The latest numbers come amid ongoing expectations of strong levels of housing construction activity for at least several years, with an expected easing in multi-residential construction partly offset by further growth in detached housing.
Housing Industry Association Senior Economist Shane Garrett said the latest figures bode well for the pipeline of residential building work in 2015 and underscore the importance of the housing sector at a time when several other sectors of the economy are suffering from weaker conditions.
“Residential construction was the economy’s good news story during 2014, and today’s figures indicate that we can look forward to another positive year for the industry,” Garrett said.
“With weaknesses in several areas of the Australian economy, new home building has come to life at an opportune time.”
Asked about the Melbourne market specifically, Garrett said continued strong growth was being driven by a combination of low interest rates, strong house price growth and population growth.
“I think there are a few different things going on,” he said. “The interest rate situation is one of them, but you can’t ignore the fact that prices in Victoria and Melbourne in particular have been rising so strongly in the past year and a half. That’s definitely encouraging people to develop land and build more units.”
“Also in the background there is the fact that Victoria’s population growth has been one of the strongest of any of the states over the past few years.
“These guys (new arrivals) are all going to need to be housed sooner or later.”