Weaker house building in the ACT but units still strong

Latest building approval data from the ABS reports another modest month for planned new houses in the ACT.  96 houses were approved for building over July which, although just ahead of the 94 approved over June, is still well below the 173 reported over July last year.

Just 653 houses have been approved for building in the ACT over the first 7 months of this year which remains 474 fewer or 42.1 percent less than the 1127 approvals recorded over the same period last year.

In contrast to subdued house building approvals, unit approvals in the ACT continue at relatively strong levels.  193 apartments were approved for construction over July which was significantly higher than the 133 approved over July last year.  1903 units have been approved for building over the first 7 months of this year compared to 1130 over the same period last year.  This is a remarkable rise of 773 approvals or an increase of 68.4 percent.

Reflecting the surge in unit building in the ACT the total number of dwellings approved for building this year so far has increased by 299 compared to the same period last year –  a rise of 13.2 percent.

Increased home building remains positive for the local Canberra economy through job creation and associated downstream benefits.  Continued underbuilding of houses however is a concern in a market that is characterised by underlying shortages of this type of dwelling – particularly give the recent strengthening of local housing market activity.

Record levels of new apartment approvals however conversely raise the spectre of oversupply with new activity levels pushing well ahead of underlying demand.