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. 

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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