A total of 5,705 new homes were approved across Victoria in the three months to September 2021 – up 16 per cent at the same time last year.

However, Master Builders Victoria CEO Rebecca Casson said the monthly percentage increase of building approvals in Victoria was below the national average of 22 per cent as activity continues to retreat following the closure of the successful HomeBuilder grant initiative.

Victoria recorded a 19 per cent increase in the number of building approvals for new detached houses in the three months to September 2021.

The average value of building approvals for new detached houses in Victoria during the three months to September 2021 was $379,559.

However, the number of building approvals for new medium and high-density homes in Victoria in the three months to September 2021 was up just 10 per cent compared to 38 per cent in New South Wales and 32 per cent in Queensland.

The average value of building approvals for new medium and high-density homes in Victoria during the three months to September 2021 was $389,495.

“Pleasingly, approvals for both detached houses and medium/high-density homes rose in Victoria in the three months to September 2021,” Ms Casson said.

“However, growth for detached houses (19 per cent) was stronger than for new medium and highdensity homes (10 per cent).

“While a total of 5,705 new homes were approved across Victoria in the three months to September 2021 – this is down on the 7,689-peak recorded in March 2021, which was the last month that the HomeBuilder grant initiative was open.

“This represents a 25.8 per cent reduction since then.”

Ms Casson said the volume of detached houses entering the new home building pipeline was still very high compared with the experience of the past 15 years.

“The situation adds to the growing evidence suggesting that the pandemic has induced a permanent shift in consumer preferences towards detached houses from medium and high density,” she said.

“It remains to be seen where the downturn in detached house building eventually bottoms out.”

Ms Casson said medium and high-density approvals were already suffering a deep downturn before the pandemic. COVID-19 restrictions caused this to worsen.

“Today, this side of the market looks to be past its most difficult days,” Ms Casson said.

“During September 2021, the volume of medium and high-density approvals was 44.9 per cent higher nationally than a year earlier.

“Growth has been more pronounced amongst high-density approvals, which are 46.9 per cent higher nationally in September 2021 than in September 2020.

“However, new medium density home approvals have also seen substantial gains over the same period (+39 per cent).”