The Urban Developer
AdvertiseEventsWebinars
Urbanity
Awards
Sign In
Membership
Latest
Menu
Location
Sector
Category
Content
Type
Newsletters
URBAN LEADER AWARDS ARE BACK! START YOUR NOMINATIONS
URBAN LEADER AWARDS ARE BACK! START YOUR NOMINATIONS
LEARN MOREDETAILS
TheUrbanDeveloper
Follow
About
About Us
Membership
Awards
Events
Webinars
Listings
Resources
Terms & Conditions
Commenting Policy
Privacy Policy
Republishing Guidelines
Editorial Charter
Complaints Handling Policy
Contact
General Enquiries
Advertise
Contribution Enquiry
Project Submission
Membership Enquiry
Newsletter
Stay up to date and with the latest news, projects, deals and features.
Subscribe
ADVERTISEMENT
SHARE
57
print
Print
ConstructionEditorial DeskMon 04 Feb 19

Apartment Approvals Fell 40% Last Quarter

6cd2a0f5-0f99-404e-b62a-2a82e51dd9c1

Building approvals figures, released on Monday, defied predictions and fell to their lowest levels since 2013.

The ABS data was released on the morning of the banking royal commission final report, adding to growing housing market unease.

Approvals declined by 8.4 per cent in December from a month earlier, and by 22.5 per cent from a year earlier.

Apartment approvals was hit even harder: experiencing a 40.1 per cent fall for the quarter. Approvals to build apartments fell by 18.8 per cent in December, following an 18.3 per cent drop in November.

“The boom in approvals of apartments is now over,” HIA principal economist Tim Reardon said.

“Apartment approvals averaged almost 30,000 per quarter for the three years of 2015-17, in stark contrast to the 17,778 record for this December quarter.”

The largest falls were seen in New South Wales, Victoria and Queensland.

Related: Inflation Pulse Check Good for Home Buyers

Slowdown in building activity will 'remain modest'

Reardon says the record volume of new homes built over the past four years is one of the reasons house prices are returning to more affordable levels.

“Housing affordability is about ‘supply and demand’ and for most of this century there have been constraints on new home building that have limited supply and forced up prices,” he said.

Last year was the fifth consecutive year where the industry commenced construction of more than 200,000 homes and it was a record year in terms of new dwelling completions.

Reardon also said the new home building constraints were also behind Sydney’s mammoth growth in the five to six years leading up to 2017.

“More important than house prices, the stalling of rental price inflation over the past year is the most important indicator that tells us that the pent-up demand for new housing in Sydney and Melbourne has now been met by a record volume of new housing.

Master Builders Australia last week said it expects houses and units built in Australia to drop by 25 per cent from a construction peak three years ago through to 2022-2023.

But while the nation’s population growth remains solid, Reardon expects the current slowdown in building activity “will remain modest”.

In good news for renters, Reardon said we’ve now seen 14 consecutive quarters where rental price growth has been below inflation.

ResidentialAustraliaBrisbaneMelbournedo not useConstructionReal EstateConstructionSector
AUTHOR
Editorial Desk
More articles by this author
ADVERTISEMENT
TOP STORIES
Exclusive

Soheil Abedian: What’s Driven the Man Who’s Transformed a City

Phil Bartsch
6 Min
Exclusive

Robots Not a Miracle Cure for Housing Productivity Crisis

Vanessa Croll
6 Min
Exclusive

Where 600 Wealthy Families Are Putting Their Millions

Taryn Paris
6 Min
Brique Projects EDM
Exclusive

Brique Thrives in Cauldron of SE Queensland Development

Clare Burnett
7 Min
Henny Prime Henny Background
Exclusive

Why Henny and Prime Edition are Moving into Student Living

Leon Della Bosca
7 Min
View All >
Erin Holland and Natalie Lewis at Urbanity 25
Development

Next Gen Now: Developers Bucking Industry Norms

Leon Della Bosca
Development

Urbanity Day Two: Five Key Takeaways

Vanessa Croll
Construction

Barings Breaks Ground on $400m Waterloo Project

Taryn Paris
A 400-apartment project that could accommodate more than 1000 residents at Sydney’s Waterloo has been hailed as transfor…
LATEST
Erin Holland and Natalie Lewis at Urbanity 25
Development

Next Gen Now: Developers Bucking Industry Norms

Leon Della Bosca
6 Min
Development

Urbanity Day Two: Five Key Takeaways

Vanessa Croll
10 Min
Construction

Barings Breaks Ground on $400m Waterloo Project

Taryn Paris
2 Min
Tye Alero
Development

Development Industry Mourns Death of Alroe Founder

Renee McKeown AND Lindsay Saunders
2 Min
View All >
ADVERTISEMENT
Article originally posted at: https://www.theurbandeveloper.com/articles/construction-supply-and-demand-on-housing-affordability