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CEO AllenWargent Property Buyers, & WargentAdvisory (institutional). 6 x finance author.

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Tuesday, 2 August 2016

Brisbane apartment approvals tail away

Approvals slide

Building Approvals declined by 2.9 per cent in June to be 5.9 per cent lower over the year.

There were 18,693 approvals in June, now some way below the record 21,201 seen in May 2015.

Although the annual total of building approvals is now clearly slowing, total approvals are still at historically high levels at just above 233,000. 

City by city

House approvals look as though they are heading down to around 12,000 per annum in Perth, which is a good sign for that market, while Melbourne continues to pump out house approvals.

There was a huge decline in unit, townhouse, and apartment approvals in Brisbane in June to 782 (down from 2,510 in April), so that approvals boom looks to be well and truly over. 

And indeed generally attached approvals look to have passed their peak. 

High rise boom peaking

This cycle has been characterised by record approvals of four plus storey dwellings, but the annual total is now paring back.

With tighter lending policies having been enacted - including for non-resident purchasers - it wouldn't be a surprise to see the higher density approvals type declining from here. 

We should see approvals in Melbourne dropping in particular, following some pull forward of high rise approvals. 

The wrap

Overall, the volume of building approvals remains high, but the trend is down. 

Annual approvals of above 233,000 is still a very high reading.

But with about half of those being attached dwellings, based upon historic trends it's entirely possible (if not likely) that up to 20,000 or more of these approvals never translate into actual dwellings constructed.