Here’s what’s happening to new house construction and what it means

Capital city house construction levels continue to increase, enhancing overall national new home supply and providing the prospect of rising activity for an underperforming economy.Diversity Housing

Latest ABS data reports that the number of capital city building approvals for houses increased by 5.0 percent over November to 6,818 and was also up by 4.3 percent compared to the total reported over November 2015, the year before.

Although capital city house building approvals increased over November, the 72,023 recorded over the first 11 months of 2016 was 1.5 percent fewer than recorded over the same period in 2015.


All capitals recorded monthly increases in house building approvals with the exception of Sydney down slightly by 0.9 percent and Darwin which fell sharply by 31.5 percent to just 37 approvals – its lowest November monthly total since 2011.

The Melbourne market accounted for the most house building approvals reported over the first 11 months of 2016 with 24,772 –a strong increase of 9.7 percent compared to the same period in 2015.

Next highest was Perth with 16,438 house approvals – but down 27.5 percent, followed by Sydney 15,919 – up 1.5 percent,   Brisbane 10,974 – up 4.8 percent, Adelaide 5,871 – up 9.9 percent, Canberra 943 – and up a remarkable 26.1 percent compared to the same period the year before, Hobart 742 – down 17.3 percent and Darwin which recorded just 774 house building approvals over the first 11 months of 2016 and steep a fall of 18.3 percent compared to the same period over 2015.


Lower interest rates over recent years have increased the demand for housing with supply levels rising to match this higher demand.

Capital city markets however continue to respond at markedly different rates reflecting the nature of local supply and demand drivers and particularly the overall performance of local economies.

Source: Domain

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Dr Andrew Wilson is Australia’s leading housing market expert. As senior economist for Fairfax-owned Domain Group, Dr Wilson is one of the nation’s most respected real estate analysts and Australia’s highest profile housing market commentator. Visit his blog at Domain

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