Housing approvals hit record in 2015; apartments also at a high

03 February 2016

AFR.com, 3 February 2016

by Michael Bleby

Housing approvals hit new annual high in 2015, with planning authorities giving the tick to 232,078 new homes. 

The number of new dwellings approved rose almost 14 per cent on the previous year, driven by a new annual record for units and townhouses, which leaped 30 per cent to 115,752. The figures are seasonally adjusted.

The figures show the importance of the growing apartment market, which now makes up half of all new housing stock approved, compared with the historical figure of closer to one-third of the total. Apartment approvals pushed the totals higher in NSW, Victoria and Queensland. 

Despite strong monthly figures – December's 9.2 per cent rise in approvals more than doubled the 4.5 per cent consensus estimate by economists – there are clear signs the buoyant housing construction market is slowing. While calendar year 2015 marked the strongest annual total for approvals on record, on a rolling 12-month basis the total has fallen for the past two months from October's 233,984.

CONTRIBUTION TO EASE

"In trend terms, approvals are indicating housing construction will slow from around 220,000 dwellings in 2015 to 205,000 by the end of 2016," ANZ economists Daniel Gradwell and David Cannington said in a research note. "We continue to believe that the contribution to economic growth from the housing sector will ease through 2016."

House prices are likely to grow just 1 per cent this calendar year and apartment prices will decline 1.2 per cent as tighter credit, worsening affordability and increasing supply hit the residential market, National Australia Bank said in its fourth-quarter Australian residential property survey on Wednesday. 

Developers are still proposing new projects, however. Melbourne-based Dreckoncile has lodged plans for St Kilda Junction, a 28-level, mixed-use tower with 286 apartments, designed by Plus Architecture.

Nearly two-thirds (64.3 per cent) of all units approved over the year were high-rise (four storeys or more). Just over a quarter (27 per cent) were townhouses and a record-low 8.7 per cent were low rise (below four storeys). High-rise approvals have been growing at the expense of townhouses, CoreLogic RP Data research analyst Cameron Kusher said. 

"This is reflective of the large volume of infill development taking place, particularly in inner-city areas," Mr Kusher said. "From a developer's perspective the returns are much higher building to high-densities. More recently... there has been a slight easing of high-rise unit approvals however, developers are still overwhelmingly seeking more high-rise approvals than approvals for low-rise or townhouses."

Read More: http://www.afr.com/real-estate/housing-approvals-hit-new-record-in-2015-apartments-also-at-a-high-20160202-gmk8th https://propertyshell.com 

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