Australian building approvals saw robust growth in November, driven by Victoria’s high-rise apartment sector.
Approvals for apartment construction were up 5.6% in Victoria but they plunged by nearly 22% in the capital.
Likewise, building approvals dropped for the fifth consecutive month in Queensland, with the trend blamed on an oversupply of units.
Overall, residential building permissions granted to Australian construction firms rose by 11.7% during November when compared with October, while economists had expected a contraction in planning consents.
Compared to November 2016 they were up by 17.1%. The estimated value of approvals rose 9.4%.
It was the strongest monthly outcome in 12 months and was the third-largest monthly total on record, only surpassed by April and August 2016, the peak of Australia’s residential building boom.
In the previous month, building approvals had registered a revised fall of 0.1%. On a yearly basis, approvals surged 17.1% – again beating expectations for a gain of 4.6%.
The notoriously volatile 'other dwellings' category including apartments and townhouses leapt 30.6% in November - up from a 1.0% decline in October - which JP Morgan analyst Tom Kennedy said was likely due to the approval of a very large single project.
Private house approvals fell 2% in November, the Australian Bureau of Statistics (ABS) figures show, and were up just 2.2% from November 2016.
“Dwelling approvals have continued to rise in recent months, which has been driven by renewed strength in approvals for apartments,” ABS Director of Construction Statistics Justin Lokhorst said.
“Approvals for private sector houses have remained stable, with just under 10,000 houses approved in November 2017.”
The Australian dollar gained on the release, although the property market is expected to cool this year after a dip in home prices in the 2017 December, alongside tighter restrictions on lending, especially to investors.
According to data from CoreLogic, Australian home prices fell by 0.3% in December, led by declines of 0.9% and 0.2% in Sydney and Melbourne, Australia’s largest and most expensive housing markets.
“After a faltering about nine or 12 months ago, building approvals have come back with a vengeance,” Market Economics Chief Economist Stephen Koukoulas told Domain.