The latest ABS data on monthly new dwelling approvals shows that approvals of new detached dwellings across Victoria declined in December 2016, whilst units and apartments continued to experience strong recovery. Total number of new dwellings approved recorded 6,129, around 308 or 5.3 per cent more than those approved in November 2016. Compared with the same period in 2015, total approvals grew by 718 dwellings or 13.3 per cent.

Monthly New Dwelling Approvals
TOTAL VICTORIA, HOUSES & UNITS, DECEMBER 2014 – DECEMBER 2016ABS dwelling approvals 03 Feb 2016 M 550

Of note:

• The approvals of new units continued with the robust upward trend in December. A total of 3,694 units or apartments were approved, up by 1,122 dwellings on November 2016 and 836 dwellings on December 2015. Similar to the rebound recorded in November, the last month of 2016 continued to see strong recovery in approvals granted to larger apartment projects of four storeys or more, which recorded 2,633 dwellings, almost double the amount for November (1,364 approvals) and well above the recent low of just 430 approvals in October 2016. The surge in new units and apartments approvals is believed to have further pushed up the development pipeline in the segment (see previous release update: Building Activity Slowed in Light of Record High Pipeline). As suggested by the chart above and has repeated various times in history, it is likely that units or apartments approvals will continue to see high volatility in the coming months.

• In the meantime, new houses approvals dipped significantly during the same period. The total number of new houses approved recorded approximately 2,435 dwellings, having declined by around -25 per cent on November 2016, or -4.6 per cent compared to a year earlier. Nonetheless, total detached house approvals reached 36,356 in 2016, up by 6 per cent on 2015, representing a solid growth in the green field residential market over the past year.

• In 2016 there were a total of 67,269 dwellings approved in Victoria, dipping slightly by 1 per cent on a year-on-year basis. This was due primarily to the market adjustment in the unit and apartment segment which saw total approvals decline by around -9 per cent or over 2,900 dwellings during the past year.