Building approvals hit record $15.6bn: ABS

The Australian Bureau of Statistics (ABS) has released figures on building approvals for March 2021, which has shown that the value of total building approved rose by 36.3 per cent over March to $15.6 billion.

According to the data, this was driven by a 59.4 per cent rise in the value of non-residential building to the highest level recorded ($6.7 billion), amid a large increase in both private and public projects in March.

The value of residential alterations and additions approved also reached a record high of $1.1 billion in March, marking a 7.3 per cent monthly rise, ABS figures showed.

The value of total residential building rose by 22.9 per cent over March to total $8.9 billion, driven by a 25.4 per cent rise in new residential building to $7.9 billion.

The ABS figures also showed that the total number of dwellings approved in March was the second highest on record since November 2017.

The number of dwellings approved increased by 17.4 per cent in March (seasonally adjusted terms) to 23,176, representing a 47.4 per cent yearly increase, the figures showed. This followed a 20.1 per cent rise in February.

The increase was attributed to a 63.6 per cent surge in private sector dwellings excluding houses to 8,563, marking a 27.4 per cent yearly increase.

According to ABS director of construction statistics Daniel Rossi, the number of detached houses’ approvals edged up by 0.1 per cent to a new record high of 14,117 in March, which he attributed to the HomeBuilder scheme (applications for the scheme closed in April, with applicants being given until 30 April 2023 to submit all supporting documentation).

Across the states and territories, total dwelling approvals rose in NSW (26.9 per cent), Victoria (24.7 per cent), Queensland (12.1 per cent) and South Australia (3.5 per cent) in seasonally adjusted terms, but fell in Western Australia (6.4 per cent) and Tasmania (4.8 per cent).

Approvals for detached dwellings fell by 10.5 per cent in NSW, 4.0 per cent in Queensland, and 0.1 per cent in Western Australia, but rose in Victoria (7.8 per cent) and South Australia (3.6 per cent), in seasonally adjusted terms.

Building work to spur jobs: HIA

Commenting on the ABS dwelling approval figures, Housing Industry Association (HIA) senior economist Nick Ward said the association is expecting a record volume of building work to commence this year and into 2022, with more than 130,000 new detached homes to begin construction.

“The record volume of work will see the industry absorb workers from across the economy,” he said.

Noting that detached housing approvals in March reached record levels since the ABS began this series in 1983, Mr Ward said that approvals in the three months to March were 54.2 per cent higher than at the same time last year.

“This is consistent with the results in more timely leading indicators such as HIA’s New Home Sales report,” he said.

The March New Home Sales report showed that sales were 39.4 per cent higher in the March 2021 quarter than the same time the previous year, according to HIA economist Angela Lillicrap.

Mr Ward said that multi-unit approvals recorded a strong month in March, but added that this segment is prone to volatility.

“This surprisingly strong result was driven by a rise in approvals for townhouses and high-rise apartments in NSW, Victoria and Queensland,” Mr Ward said.

Renovation approval values increased by 34.1 per cent for the three months to March compared with the previous year, he said.

According to HIA’s analysis of ABS data, in seasonally adjusted terms, detached housing approvals during the three months to March 2021 increased by 154.8 per cent in Western Australia and 80.3 per cent in South Australia compared with the same time last year.

Approvals also increased in Queensland (50.7 per cent), Victoria (36.1 per cent) and NSW (26.0 per cent).

In original terms, during the same period, detached approvals rose by 50.8 per cent in Tasmania, 217.9 per cent in the Northern Territory, and 43.5 per cent in the ACT, compared with the same time last year.

[Related: Victoria leads on loan commitments: CommSec]

Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.

Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.