Good news from the home building industry at the start of 2024-25.
Figures out on Monday showed building approvals jumped more than 10% in July after local governments started clearing backlogs left at the end of the June financial year and quarter.
Data on Monday from the Australian Bureau of Statistics showed the total number of dwellings approved rose by 10.4% in July to 14,797, following June’s 6.4% drop (a fall of 6.5% was originally reported).
According to the Bureau’s figures, July’s total was the highest in 15 months—since May 2023.
Daniel Rossi, ABS head of construction statistics, said in a statement that the rise was driven by a significant increase in approvals for apartments, units, and similar dwellings.
“Private dwellings excluding houses rose 32.1% after a low June result. Private sector house approvals also rose by 0.6%,” he noted.
“Despite the bounce in July, total dwellings approved remain 5.1% lower than the five-year average.”
Private sector house approvals rose to 9,252 dwellings, driven by an 8.5% rise in New South Wales in July. This was the highest total since October 2022.
The big test will be the figures for August, released next month, to see if there is any decline in approval numbers and where it occurs. Historically, there is sometimes a bit of a pullback the month after a big gain, or a bigger-than-expected rise following a significant fall, as seen in June.
The ABS noted that private sector house approvals across the remaining states were mixed. Queensland and Victoria saw declines after both states experienced growth in June, while South Australia and Western Australia continued to trend upwards. Private house approvals in Western Australia reached their highest level since July 2021, in seasonally adjusted terms.
The substantial 32.1% increase in non-private dwelling approvals brought the total to 5,234 dwellings, the highest number since November last year.
July’s total was up 15.9% compared to a year ago and followed a low June result of 3,963 dwellings approved, which was a fall of more than 19% from May and the second-lowest monthly total since 2012. July approvals were also down 22% from June 2023, making the rebound in July this year dramatic.
The ABS reported that the rise in this area “was driven by an increase in approvals for high-density apartments. There were 2,504 apartments approved in blocks of nine or more storeys in July, in original terms, compared to 533 in June.”
The ABS added that July saw the value of total building approvals rise by 6.8% to $13.18 billion, following June’s 6.2% decline. Total residential building approvals rose by 9.0% to $8.49 billion, with the primary driver being the nearly 12% increase in the value of new residential buildings approved, which jumped to $7.38 billion.