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Approvals Data Highlights the Need for Medium Density

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Earlier this month, the Australian Bureau of Statistics released detailed dwelling approval data to November 2019.

Breaking down approved dwellings by local government area highlights a concentration of new development in south-east regional and metropolitan centres, and a relatively low level of medium-density approvals.

A quarter of approvals were in 10 regions

Dwelling approvals by LGA, year to November 2019 – Australia
▲ Dwelling approvals by local government area, year to November 2019 – Australia. Image: Corelogic

In total, there were 171,760 new dwelling approvals across Australia in the year to November 2019. Of the local government areas captured, 478 regions, or 88 per cent, had new dwellings approved.

However, over a quarter of total approvals were concentrated in just 10 local government areas.

These include the ACT region, Brisbane, Sunshine Coast and Gold Coast Councils, parts of Western Sydney, and areas on the fringe of the Melbourne metropolitan.

▲ Top 10 LGA regions by number of total dwellings approved in the year to November 2019. Image: Corelogic
▲ Top 10 LGA regions by number of total dwellings approved in the year to November 2019. Image: Corelogic


The combined number of dwellings approved in these 10 local government areas is approximately 43,000. They are largely in, or at the fringe of, established urban centres of Victoria, New South Wales and Queensland.

Detached housing dominated approvals in these regions. On average, detached housing made up 60.7 per cent of approvals in the top 10 local government areas, high-density units—in a building of four or more storeys—averaged 25.2 per cent, while approvals for housing types in between these two densities averaged 14.1 per cent.

▲ Top 10 LGA regions by number of total dwellings approved in the year to November 2019, dwelling type breakdown. Image: Corelogic
▲ Top 10 LGA regions by number of total dwellings approved in the year to November 2019, dwelling type breakdown. Image: Corelogic


The persistently missing middle

The "missing middle" refers to a paucity of new development that provides low rise, medium-density housing options, such as townhouses and duplexes.

Some definitions of medium-density also include low rise unit builds.

Medium-density housing options can be important for young families who seek a more affordable housing option close to city centres, but require more space than in a unit, or older Australians wishing to downsize in their current area of residence to reduce housing costs in retirement.

As populations continue to converge in metropolitan regions, demand for such diverse housing options are likely to grow.

The development of more medium-density housing in Australia is particularly efficient for infilling major metropolitan areas, because it takes advantage of established transport and social infrastructure.

The trend of a relatively small portion of dwellings planned across townhouses and smaller unit blocks was fairly persistent across local government areas.

Of the 478 regions with approved dwellings over the year, an average of 14.9 per cent of dwellings were approved as townhouses, duplexes or in unit blocks with 3-storeys or less.

This is higher than the average across existing stock, with ABS data suggesting councils currently have an average of 11.9 per cent medium-density dwellings.

As dwelling prices are expected to continue rising in 2020, and affordability resurges as an issue for buyers, demand for cheaper housing options will only rise.

If development continues to focus on the two extremes of density, metropolitan areas may see an erosion of diverse age and family demographics.

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Article originally posted at: https://theurbandeveloper.com/articles/approval-data-highlights-the-need-for-medium-density