Maroc - TIMBERBIZ.COM.AU - A La Une - 07/Jan 23:16

Moderate recovery in housing

Building approvals data reveals the ongoing strengthening in the new home building market and continue to point to a moderate-pace recovery in 2025. Source: Timberbiz The Australian Bureau of Statistics released its monthly building approvals data for November 2024 for detached houses and multi-units covering all states and territories. HIA Senior Economist, Matt King, said that total dwelling approvals fell by 3.6% compared with the previous month but were still up 7.2% over the three-month period. Total dwelling approvals were up 5.4% in the three-month period compared with the corresponding period in 2023. And detached house approvals in the three months to November 2024 increased by a modest 0.7% on the previous three-month period and climbed 7.1% compared with the same period in the previous year. “Following a period of prolonged weakness, there are signs of life again in building approvals, which is pointing to a nascent recovery in new home building.” Mr King said. “November 2024 marked exactly one year since the RBA last raised interest rates. Unchanged interest rate settings have provided a welcomed degree of certainty for consumers. “Population growth rates have slowed across the country but remain elevated which is contributing to strong underlying demand for housing. “Detached house approvals continue to rebound off a very low base, further confirming that the trough of the cycle is now in the rear-view mirror,” he said. Multi-unit approvals rose by 20.1% in the three months to November 2024 and were up 2.6% on the corresponding period in 2023. Despite some observable improvement, approvals for multi-units have been trending at decade-low levels and remain subdued amid challenges with capacity. “For the entirety of 2024, multi-unit approval volumes were erratic and trending at decade-low levels,” Mr King said. “The sector is still reeling from a perfect storm of building material cost escalation resulting from supply chain bottlenecks, skilled labour shortages, credit constraints for businesses, and an elevated public sector infrastructure pipeline that is absorbing skilled trades. “The overall outlook for new home building is characterised by a multi-speed recovery with increasingly divergent trends across different regions and housing types.” Perth, Adelaide and South-East Queensland continue to lead the way in new home contract sales and building approvals. Meanwhile, activity in Sydney remains muted and there is no indication of a lasting recovery in either detached housing or the multi-unit sector, for now. “At the national level, market confidence is returning as the majority of capital city and regional markets now appear to have moved through the trough in new home building activity. A national recovery is in sight,” Mr King said. “Nevertheless, the size of the upswing in new home building activity will be heavily influenced by Federal and State Government housing policy settings. “Policy makers must double-down on the pursuit of efficiencies and improvement in industry red tape, the excessive taxation of home build, the availability of land for residential development, and the supply of skilled labour.” Detached house approvals in the three months to November 2024 rose by 40.8% in Western Australia compared to the same time in the previous year. This was followed by South Australia (+26.5%), Queensland (+14.6%), and the Northern Territory (+10.5%). The other states and territories recorded declines over the same period, led by the Australian Capital Territory (-34.6%), followed by New South Wales (-7.5%), Victoria (-4.5%), and Tasmania (-2.7%). Multi-unit approvals in the three months to November 2024 climbed significantly in Western Australia (+207.5%) compared with the corresponding period in the previous year. This was followed by Queensland (+16.0%), Victoria (+9.4%) and New South Wales (+1.6%). The Northern Territory registered a flat result. Declines were recorded in Tasmania (-85.7%), the Australian Capital Territory (-82.4%), and South Australia (-15.1%).