Think of the tradies: House building approvals at record high

author-avatar By on February 03, 2021
Think of the tradies: House building approvals at record high

The latest data indicates private house building approvals surged 55.6% on the year, while new unit builds fell nearly a fifth.

Just under 14,000 private sector houses were approved in December 2020, representing a jump by more than half compared to December 2019 in seasonally adjusted terms, according to the Australian Bureau of Statistics (ABS). 

Private sector dwellings excluding houses - i.e. units - dropped 19.3%, down to 5,625 units approved, while private sector house approvals rose for the sixth consecutive month, reaching a record high. 


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

Base criteria of: a $400,000 loan amount, variable, fixed, 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 divergence between unit and house approvals was seen in most states, except in Queensland and Western Australia.

In Queensland, unit approvals were up by 80% compared to November 2020, and in the West, unit approvals were up by a third on the month.

House approvals climbed just 7.3% in the Sunshine State, and 4.7% in Western Australia.

This is compared to the national average, climbing 15.8% for private houses, and 2.3% for units. 

The state with the biggest monthly individual jump in housing approved was South Australia, up more than a third, followed by Victoria at 17.2%, and New South Wales at 16.2%. 

For total dwelling units approved, however, Tasmania led the charge, up by two thirds on the month.

The ABS says NSW recorded its highest private house approval figure since March 2000, and Queensland had its highest since September 1994. 

ABS head of construction statistics Daniel Rossi said federal and state stimulus measures have contributed to the overall rise in approvals.

"Private house approvals were strong across the country, with Victoria, South Australia and Western Australia hitting record highs in seasonally adjusted terms," he said.

"Despite the uncertainty experienced by developers and households during 2020, the total number of dwellings approved in the calendar year was 4.8% higher than in 2019."

Chief economist at IFM Investors Alex Joiner pointed to a potential headwind in 2021.

"These approvals levels if sustained will likely create some variance in dwelling price performance - while the median will still rise materially overall, clearly areas where supply is coming on - in the absence of population growth - will not experience the same rise," he said.


Source: Know Your Meme

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.
  • If you click on a product link and you are referred to a Product or Service Provider’s web page, it is highly likely that a commercial relationship exists between that Product or Service Provider and Savings.com.au

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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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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