New home building in Australia saw strongest ever year in 2015

Taylor Scott International News

New home building approvals in Australia recorded their strongest ever year during 2015, up 13.7% compared to 2014, according to the latest data from the Australian Bureau of Statistics. But they fell towards the end of the year, down by 4% in the final quarter of the year, although there was variation according to housing type. In 2015 as a whole approval for flats increased by 30.2% but for detached houses they fell by 1%. Shane Garrett, senior economist for the Housing Industry Association pointed out that last year a total of 232,078 new homes received approval for construction, well above every calendar year on record. ‘New home building has been a crucial support to economic growth over the past two years, particularly in light of the mining investment downturn. The challenge during 2016 will be manage the transition to lower volumes of new home building in an orderly fashion,’ he said. The ABS data shows that approvals decreased in December in the Australian Capital Territory by 21.9%, by 3.1% in Western Australia, by 0.8% in Tasmania, by 0.4% in New South Wales and by 0.4% in South Australia. They but increased by 1.8% in the Northern Territory, by 1.6% in Victoria and by 1.1% in Queensland in trend terms. In trend terms, approvals for private sector dwellings excluding houses fell 0.1% in December. In contrast, approvals for private sector houses rose 0.1%. Private sector house approvals rose in Queensland by 0.8%, in Victoria by 0.7% and South Australia by 0.5% but fell in Western Australia by 1.8% and in New South Wales by 0.2%. The seasonally adjusted estimate for dwelling approvals rose 9.2% in December following a 12.4% fall in November. The rise in December was driven by apartments. The value of total building approved rose 0.2% in December, in trend terms, after falling for four consecutive months. The value of residential building rose 0.1% while non-residential building rose 0.4%.The volume of new home construction in Australia has fallen for the third month in a row with data for November 2015 also showing that new homes sales are falling. The new home sales report from the Housing Industry Association (HIA) says that a confluence of factors is driving a decline in leading indicators of new home construction. ‘The lagged effect of slowing population growth, an up-tick in variable mortgage costs, over reach on the part of APRA’s credit controls, and an easing in property price growth in Sydney and Melbourne are all in play,’ said HIA chief economist Harley Dale. Taylor Scott International

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