NSW Building Approvals at 33-Year High

New South Wales is leading the way for building approvals, hitting highs last seen in the 1980s.

The number of houses approved in April increased 30.1 per cent and apartments were up 12.1 per cent, according to the latest Australian Bureau of Statistics data.

Nationally, private sector houses reached a record high, up 4.6 per cent in April as the HomeBuilder scheme came to an end.

Despite the high level of approvals, the national results were down 8.6 per cent for the month, dampened only by the 18.9 per cent rise in March.

While NSW led the way for building approvals in March, house prices for April had the second biggest upswing in 32 years.

House prices went up 3.5 per cent and apartments 1.8 per cent, led by Sydney’s beachside and eastern suburbs, according to Corelogic.

Monthly change in Australian building approvals

^{_{^Source: Australian Bureau of Statistics, Building Approvals April 2021}}

ABS construction statistics director Daniel Rossi said the April result highlighted the continued strong demand for detached housing.

“Since the introduction of HomeBuilder in June, 2020, private house approvals have risen 84 per cent,” Rossi said.

“South Australia hit a new record high in April and New South Wales reaching the highest level since December 1988.”

However, Rossi said, HomeBuilder was likely to influence approval rates for a few months to come as the building approval process typically occurs after the submission of the grant application.

The highs achieved in March also had an impact on the building value results, down 22.6 per cent in seasonally adjusted terms.

The value of non-residential building fell 43.2 per cent, mainly driven by a decrease in public sector approvals, following a record high reached in March.

BIS Oxford Economics economist Maree Kilroy said national approvals were very elevated and would remain that way for a while.

“HomeBuilder has pulled forward some demand, but we don’t expect a bust in new home sales after its conclusion,” Kilroy said.

“A series of fundamentals will continue to support new dwelling demand, including record low interest rates, robust property price growth, elevated household savings, preference shifts and a rebounding economy.”