Buoyant property market conditions have created a surge in dwelling approvals in Australia with record-high levels of activity over recent months according to recent Australian Bureau of Statistics (ABS) data.
This analysis of the regions across the country identifies where the highest number of house and unit approvals has occurred this financial year.
The data shows that 214,331 dwelling approvals were recorded nationally over the past year with approvals for unit developments at a record high and accounting for 45.9 per cent of all approvals.
The current surge in dwelling approvals has coincided with very low interest rates and surging demand from the investment segment of the market.
Across the combined capital cities more than half of all dwelling approvals are for units and in each capital city (except Adelaide, Perth and Hobart) more than 50 per cent of approvals over the past year were for units.
Data from the ABS 2011 Census also shows that across the country, units are more than twice as likely to be rented as houses which would indicate a clear preference from the investment segment which is currently so active for units over houses.
While new dwelling approvals is significant, on a smaller scale, it’s worthwhile examining the regions where the new housing supply is being approved.
Looking at dwelling approvals across SA4 regions of the country, we have listed the top 20 regions for approvals for both houses and units over the 2014-15 financial year to April 2014.
South East Melbourne, which includes council regions such as Casey and Cardinia, recorded the greatest number of approvals over the financial year with 4,874 approvals.
Looking at the top 20 list published, 15 of the 20 regions listed are located within capital cities with only Geelong, Sunshine Coast, Gold Coast, Latrobe-Gippsland and Bunbury in noncapital city areas.
The top 20 list shows 3 NSW regions, 6 regions from Vic, 5 regions from Qld, 1 SA region and 5 regions from WA.
Inner city Melbourne recorded 12,516 unit approvals so far this financial year.
Inner City Melbourne is already seeing a huge volume of new construction and the pipeline just keeps growing.
To put the volume of approvals in perspective, Brisbane Inner City with the second highest number of approvals (5,808) has less than half as many unit approvals as Inner Melbourne.
The Gold Coast is the only non-capital city area listed amongst the top 20 regions for unit approvals.
Looking at the state-bystate breakdown there are 6 NSW regions listed, 6 Vic regions, 4 Qld regions, 1 SA region, 2 WA regions and 1 ACT region.
With construction activity remaining high and much of it high-density development, the heightened construction activity is likely to continue for a number of years.
The biggest hurdle for developers may be achieving presales which are generally necessary for project commencement, particularly given that many financial institutions are now starting to tighten their lending practices on the request of APRA.
With a particular focus on investment mortgages this may have an impact on demand from investors who are seemingly a key driver of the surging demand for inner city units.