Pleasingly, recent new home building approvals data from the ABS indicate that a slight expansion occurred across the HIA Hunter Region during 2016, said the Housing Industry Association. In total, the HIA Hunter Region ABS figures show in the 12 months to December 2016 that a total of 5,792 approvals have been issued for new dwellings, an increase of 1% or 69 dwellings when compared to the same period in 2015.
Breaking this down further, detached family homes continue to be the most popular dwelling type in the Hunter accounting on average for 70% of all dwelling approvals. Pleasingly approvals for detached dwellings have increased by 7% in the 12 months to December 2016 when compared to the year prior. Multi-unit approvals, a rather volatile element of our regional economy, have dropped away by 9% over the same 12 month period.
Overall the positive note is that these numbers for both detached and multi-unit approvals are all operating at elevated levels that are in the vicinity of decade highs numbers. In recent years the overall increases in new home building approvals has been spread across both detached new homes and multi-unit approvals and this has ensured a high level of building activity locally.
Whilst at the regional level there is much to be positive about when individual LGAs are examined there is unfortunately a patchwork of results, something that is mirrored unfortunately nationally. The following table shows LGA total dwelling approvals for the two previous calendar years.
Positively the 12 months to December 2016 total approval numbers are 19% above the dwelling targets established in the recently released Hunter Regional Plan 2036. When combining the recent work that the NSW Government has been managing in ‘Revitalising Newcastle’, with historically very low lending rates, a high approvals pipeline, surges in coal prices and recent reports of mining expansion, local business and consumer confidence should continue to grow over the near term providing further backing to the residential construction sector.
Whilst HIA believes that the very healthy levels of activity that the residential sector has been experiencing locally will continue in early 2017, we do hold a longer-term picture of a slowing sector. The latest HIA forecasts recently released indicate that new dwelling starts in NSW are likely to contract by 10.8% in 2017 following record state level approvals in 2016. The contraction is largely due to considerably weaker activity on the multi-unit side in Sydney.