Mixed bag for approvals

Approvals for detached housing appear to have peaked for the time being, but multi-residential approvals are set to continue growing in the short-term, analysis of approvals statistics by the Real Estate Institute of Western Australia shows.

Overall, Western Australian building approvals declined in August after a bumper month in July, according to seasonally adjusted figures from the Australian Bureau of Statistics.

The seasonally adjusted numbers showed there were 2,583 dwellings approved in August, a 16.2 per cent fall on the 3,082 approved in July.

However in trend terms, the ABS said building approves increased 0.5 per cent in August for the third consecutive monthly rise.

Looking at the data in original terms, 30,994 dwellings were approved in the year to the end of August.

WA’s previous yearly record was 28,947 for the year to April 1989.

Real Estate Institute of WA head of research Stewart Darby said it appeared detached housing approvals had peaked in July, at 2,249.

Private sector detached housing approvals fell 0.8 per cent in August, according to the ABS’s trend estimates – the fifth consecutive monthly decline.

Mr Darby said the void in private house approvals was being filled with multi-residential approvals.

Multi-residential approvals, including apartments, grew to 7,404 for the year to August, but remained under the peak of 8,043 recorded in the year to October 1989.

“Certainly what the data highlights is that the current level of multi-residential approvals which are now being driven by a larger apartment component than 25 years ago is not excessive due to the strength of the detached housing sector,” Mr Darby said.

“The proportion of multi-residential approvals has varied around the 20 per cent level since the GFC downturn and is in line with the WA dwelling mix of 80:20 at the 2011 Census.

“While detached housing approvals may have peaked, multi-residential are likely to grow in the short term as a raft of projects approved by the development assessment panels proceed to the building approvals phase.”