Second wind
September's residential building approvals rose in to a seasonally adjusted 7-month high of 18,849, to be slightly higher than in August 2017, and surprisingly even a little higher than a year earlier.
The market has swung sharply away from high-density approvals, which were running at unsustainable levels, and towards houses and townhouses.
Annual approvals are now tracking at 214,725, well down from record highs of close to 242,000 at the 2015 peak.
Annual approvals are now tracking at 214,725, well down from record highs of close to 242,000 at the 2015 peak.
Allaying fears of a cataclysmic slowdown in construction, the uptrend in the value of non-residential approvals extended to eight months, to notch a record high.
The strength in non-residential approvals has clearly been driven by Melbourne, specifically relating to recent approvals for office blocks and education buildings.
Around the traps
Building approvals for houses have been strong for five months now in Brisbane, as demand shifts northwards from the other eastern capitals.
Sentiment in Perth has finally turned something of a corner now, with mineral exploration, then employment, and now asking prices for houses all shaping moderately higher.
The strong monthly result for approvals was largely driven by attached dwellings in Sydney, while Brisbane continues to decline very sharply.
Nerida Conisbee, Chief Economist of REA Group, noted a sharp uptick in offshore searches for Brisbane apartments, as bargain-hunters sense opportunities (in contrast, Sydney searches declined).
There's also been keener interest in Melbourne apartments, meanwhile, including from offshore, with education again likely to be a key driver.
Rents appear likely to rise in Melbourne in 2018, with population growth soaring yet approvals in a trend decline.
Elsewhere, attached dwelling approvals in Hobart are now rising, albeit from a very low base.
Elsewhere, attached dwelling approvals in Hobart are now rising, albeit from a very low base.
The wrap
Overall, this was a surprisingly strong result, with residential building approvals catching a bit of a second wind, and the trend value of non-residential approvals at the highest level on record.
