Building approvals surge in Perth, but...

3 weeks ago 2

Approvals off the lows, thanks to Perth

House approvals in Australia have increased by 17 per cent from a year earlier, driven by Melbourne, Brisbane...and especially Perth.

Unit approvals are a different story, altogether, down -12 per cent from a year earlier.

Melbourne and Brisbane aren't looking too clever from a unit supply perspective, while developers in Sydney have seemingly all but given up for the time being.

Sydney mustered only 662 unit approvals in September - with the exception of one seasonally weak January month in 2023, you'd have to go back a dozen years to find a weaker result.

Overall, house approvals are trending higher from their lows, at about 9,500 per month nationally, but capital city unit approvals are very soggy.

The rebound from the cycle nadir has been overwhelmingly driven by a 50 per cent increase in dwelling approvals in Perth.

Over the year to September there were 167,000 dwelling approvals in total.

For the government to hit their pledged target of 1.2 million homes in 5 years, annual approvals probably need to be closer to 250,000.

The wrap

Melbourne is faring quite solidly in terms of its housing supply, but Sydney seems to be heading for a colossal shortage of dwelling units.

Meanwhile in Perth developers are flat out trying to keep up with booming housing demand, pushing construction costs in Western Australia sharply higher.

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