Latest home building approval numbers have predictably surged off the back of the federal government’s Home Builder scheme – the first phase of which expired at the end of December.
The ABS reports that national private sector home building approvals seasonally adjusted increased by 11.5% over December to new record highs.
Dwelling approvals were also higher by 4.3% over 2020 compared to 2019.
Not surprisingly, house approvals have contributed to most of the growth over the past year, driven fundamentally since August by the introduction of the Home Builder grant.
By contrast unit building approvals were down sharply again over the year, falling by 9.3% – the fifth consecutive fall in annual approvals and the lowest annual total recorded since 2011.
63,655 private sector units seasonally adjusted were approved for building over 2020 which is nearly half the record 118,163 approved over 2015.
The imposition of strict lending constraints through financial regulations has been the key catalyst for the ongoing collapse in national new unit building over the recent years.
This collapse has significant long-term consequences for the efficient and orderly supply of housing, and for an already underperforming national economy.
The effects chronic underbuilding of recent years will be masked marginally by reduced migration through border closures, but emerging housing shortages will nonetheless act to place ongoing upward pressure on home prices.
The end of the second phase of the Home builder program in March will stifle the recent short -term surge in home building and reinforce emerging undersupply in most capitals.
from Property UpdateProperty Update https://propertyupdate.com.au/high-home-building-approvals-nothing-to-get-too-excited-about/
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