Detached house approvals hit highest level in 15 years
However, the banking Royal Commission could disrupt the sector.
New figures from the Housing Industry Association (HIA) show that detached housing approvals hit their highest level since 2003. Over the three months to April 2018, 31,562 houses were approved for construction.
"The performance of the detached housing building market is remarkable. The volume of house approvals during the three months to April was 9.9% higher than a year ago, a time when it was already elevated," HIA senior economist Shane Garrett said.
Garrett said the demand for new houses was underpinned by strong population growth, which itself was due to "robust labour markets" in the country's largest cities.
But while Garrett said the current environment was a "virtuous circle" for detached house building, he warned of risks on the horizon.
"It appears that the banking Royal Commission has already led banks to increase their scrutiny of mortgage lending. If this results in a protracted disruption to the mortgage market then there are likely to be ramifications for the home building industry," Garrett said.
Garrett added that the apartment market faced pressures from new tax rules for foreign buyers and tighter regulations.
"These interventions represent a real risk for the house building industry," he said.
Across the nation, dwelling approvals were up 39.2% in the ACT. Victoria had a strong result as well, with approvals rising 25.8%. Approvals also rose in Tasmania (15.2%) and South Australia (1.9%).
But approvals fell in Queensland, the Northern Territory, New South Wales and Western Australia.
- Property prices: You need a $100K deposit in every capital city – except this one
- NSW first home owners tax reform offers 25K grants
- Westpac home loan rate rise: 3 things you need to know
- Home loans take months, how does this bank do 7-day approvals?
- Finder’s RBA Survey: 87% of experts say consumer saving will dip as cash rate holds