Home Approvals Edge Back into Positive Territory

Home approvals rose marginally across March, making up little ground after the previous month’s 12-year low.

The number of homes approved rose 1.9 per cent in March (seasonally adjusted), after a 0.9 per cent decrease in February, according to the latest data from the Australian Bureau of Statistics (ABS).

Approvals for private houses rose 3.8 per cent while approvals for private sector homes excluding houses rose 3.6 per cent for the month.

Total home approvals rose in Victoria (3.2 per cent) and Western Australia (1.5 per cent). Meanwhile, Tasmania (-18.1 per cent), South Australia (-7.0 per cent), Queensland (-5.2 per cent), and New South Wales (-1.2 per cent) fell in March.

Approvals for private sector houses rose in Victoria (6.0 per cent), New South Wales (4.0 per cent), Queensland (3.2 per cent), and South Australia (1.1 per cent). Only Western Australia (-1.8 per cent) had a decrease in March.

The average approval value for a new house continued its annual rise in March, to $468,800 per house.

This was 4.2 per cent higher than the average value in March 2023, although the pace of growth in average approval values has slowed.

Higher construction costs continue to weigh on dwelling approvals, with the average approval value for a new house rising in all states. 

By state, average approval value compared to a year ago rose the most in Queensland (10.1 per cent), followed by Western Australia (4.2 per cent), New South Wales (3.5 per cent), Victoria (3.5 per cent), and South Australia (0.4 per cent).

The value of total building approved rose 15.9 per cent, following a 16.8 per cent decrease in February.

▲ Approval values have continued to rise.

The value of total residential building rose 8.3 per cent, comprised of an 8.7 per cent increase in new residential building and a 6.1 per cent rise in alterations and additions.

The value of non-residential building rose 28.7 per cent, after a 16.8 per cent February fall. 

The data once again painted a concerning picture of the nation’s housing crisis, according to the Master Builders Australia.

MBA chief economist Shane Garrett said while there had been a small gain in approvals for higher-density homes during the month, “we need to see more growth in this sector of the market”.

“The results mean that just 161,500 new homes have been approved during the past year,” Garrett said.

Master Builders Australia chief executive Denita Wawn said the figures “stand in sharp contrast to the yearly target of 240,000 new homes under the National Housing Accord”.

The HIA’s chief economist, Tim Reardon said there was a mismatch between rising demand from migration and constraints on the supply of housing, was was likely to mean the acute shortage of housing stock would continue to deteriorate.

“Higher density housing development is being constrained by labour, material and finance costs and uncertainties, as well as cumbersome planning rules and punitive taxes, especially on foreign investors,” Reardon said.