ABS Building Approvals data for October continues to show the positive impact of HomeBuilder on the detached house market with the highest number of approvals since early 2000, according to the Housing Industry Association (HIA).
HIA economist Angela Lillicrap said HomeBuilder was the catalyst for improving consumer confidence in the housing market.
“The strength of building approvals is due to several factors including low interest rates and changes in consumer preferences.
“HIA New Home Sales data suggests that detached house building approvals will continue to be strong over the coming months and the extension of HomeBuilder will see these strong results carry on well into 2021.
“Detached house approvals increased by 18.6 per cent in the three months to October 2020 compared to the preceding three months and are 23.2 per cent higher than the same time last year.
“This improvement was broad-based and can be seen to varying extents across all jurisdictions except for the ACT.
“Western Australia has seen the largest improvement in the last three months with detached housing approvals 62.8 per cent higher than the same time last year.
“This is due to the pent-up demand for new housing in the state, as well as other state government stimulus measures.
“Queensland and the Northern Territory have also experienced strong increases in detached housing approvals, up by 33.0 per cent and 30.6 per cent respectively, on the preceding three months.”
There is a divergence between the conditions facing detached house builders and apartment builders.
“Multi-unit approvals remain 12.5 per cent lower than the same time last year,” Ms Lillicrap said.
“The small number of multi-unit projects that gained approval in October are likely to have started the planning and building approval process years ago.
“These are not a good indicator of prospective commencements in this part of the market.
“Slower population growth, particularly in Sydney and Melbourne, and an increased preference for detached houses, will likely see demand for apartments constrained going into 2021.”