Home building ramps up in end-of-year push

author-avatar By on January 07, 2021
Home building ramps up in end-of-year push

The latest building approvals data from November shows construction of new private houses increased 6.1%.

According to the Australian Bureau of Statistics (ABS), private sector house approvals rose for the fifth consecutive month, and were at the highest-recorded level in 21 years.

New residential buildings increased 5.7% in value in November to more than $5.8 billion.

Private sector housing approvals rose in all states, with Queensland leading, up 17%. 

Total dwellings approved overall rose 2.6% in November in seasonally-adjusted terms, while unit or apartment (private sector excluding houses) construction fell 3.9%.

Buying a home or looking to refinance? The table below features home loans with some of the lowest variable interest rates on the market for owner occupiers.

Base criteria of: a $400,000 loan amount, variable, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. If products listed have an LVR <80%, they will be clearly identified in the product name along with the specific LVR. The product and rate must be clearly published on the Product Provider’s web site. Monthly repayments were calculated based on the selected products’ advertised rates, applied to a $400,000 loan with a 30-year loan term.

The value of private sector housing built amounted to $3.83 billion in November, with 11,489 private houses built, for an average value of $333,432.

ABS director of construction statistics said aside from housing, dwelling construction is at a "subdued" level.

"Approvals for private houses have surged 40% since June. Federal and state housing stimulus measures and low interest rates have resulted in strong demand for detached dwellings," he said.

"Approvals for private houses rose 6.1%  in November, while dwellings excluding houses remain at subdued levels, falling 3.9%," he said.

Alterations value increased 5.6% to $855.4 million in original terms in November.

The total number of alterations and additions approved amounted to 10,328, for an average value of $82,821- under the $150,000 HomeBuilder renovation threshold.

This represents a slight fall from October's average renovation value of $82,922. 

HomeBuilder has coincided with an uptick in overall renovation activity, with figures trending upwards from lows of less than $700 million in April.

However, prior to the HomeBuilder policy being announced in June, in May 2020, average alteration value was $85,427 - higher than it was in November, albeit at much lower volumes (7,900 alterations approved in May).

Roughly 16% of renovations, according to ABS figures, fell within the HomeBuilder thresholds, for a total value of just under $440 million out of a total $855 million.

Housing Industry Association (HIA) economist Angela Lillicrap pointed to a promising 2021.

"HIA new home sales data suggests that detached house building approvals will continue to be strong over the coming months," she said.

"The extension of HomeBuilder at the end of November is not a factor in this month’s result but will see the strength in detached house approvals extend into 2021."


Photo by R ARCHITECTURE on Unsplash

Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:

  • The big four banks are: ANZ, CBA, NAB and Westpac
  • The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2020. They are (in descending order): Credit Union Australia, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
  • The larger non-bank lenders are those who (in 2020) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.

Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site.

In the interests of full disclosure, Savings.com.au, Performance Drive and Loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.

*Comparison rate is based on a loan of $150,000 over a term of 25 years. Please note the comparison rate only applies to the examples given. Different loan amounts and terms will result in different comparison rates. Costs such as redraw fees and costs savings, such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.

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author-avatar
Harrison joined Savings in 2020. He is an experienced journalist, with previous stints at News Corp and financial comparison site Canstar. With a keen interest in personal finance, Harrison is passionate about helping consumers make more informed financial decisions.

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