Detached house approvals hit highest level in 15 years

Adam Smith 30 May 2018 NEWS

Business building blocksHowever, 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.

Need a home loan? Compare your options

Latest home loans headlines

Image: Shutterstock

Get more from finder

Ask an Expert

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms of Use, Disclaimer & Privacy Policy and Privacy & Cookies Policy.
Ask a question
Go to site