More strong building approvals for Sydney units and Melbourne houses

The boom in Sydney apartment construction continues unabated with another strong result recorded over April according to the latest ABS building approval data.

Sydney reported 3,779 approvals for units over the month which was clearly the highest monthly total recorded so far this year.

10,258 apartments have been approved for building in Sydney over the first 4 months of this year which is just 91 fewer or 0.9% less than the 10349 approved over the same period last year.

Last year’s total however was the highest ever recorded in Sydney over the first four months of the year with the market still continuing to track at near record levels.

Although Sydney unit development continue to boom, approvals for houses remain subdued and is now down by 6.1 percent over the first 4 months of this year compared to the same period last year.

The Melbourne home building market is heading in the opposite direction to Sydney with approvals for houses continuing to strengthen but unit approvals now clearly on the slide.

Melbourne approved 8,378 houses for building over the first 4 months of this year – nearly double the Sydney total. Melbourne house approvals have increased by 820 or 10.8 percent compared to the same period last year.

Melbourne apartment development continues to decline from the remarkable growth levels recorded over recent years. 2630 units were approved for building over April which was the highest monthly total for the year so far. Approvals over the first four months of this year however have fallen by 2004 or 17.7 percent less compared to the same period last year.

Home building remains a key driver of the local Sydney and Melbourne economies and although growth in some sectors is in decline from previously strong levels, overall activity nonetheless remains robust.

The recent cut in interest rates will assist the sector in maintaining the current overall positive outcomes.

Dr Andrew Wilson is Domain Group Chief Economist Twitter@DocAndrewWilson – My Property, Radio 2UE Fridays 2-3pm, Saturdays 1230-1pm