Potential oversupply and settlement risks on off-the-plan apartment purchases have not deterred the number of dwellings approved for construction across Australia’s capital cities, a report from CoreLogic has revealed.
Based on data to July 2016, the latest Property Pulse report found that there were 17,380 city dwellings approved for construction — the highest number of approvals since October 2015, and the third highest monthly number of capital city approvals on record.
“Despite a recent slowdown in capital city dwelling approvals, there was substantial rebound in July 2016,” said CoreLogic research analyst Cameron Kusher.
In Sydney there were 54,667 dwelling approvals, which was 7.3 per cent higher than the previous year. This was closely followed by Melbourne, which had 57,428 approvals, and Brisbane, which had 30,901 approvals for construction.
In Perth, the number of annual dwellings approvals fell by 24.3 per cent over the year, to 20,963.
The report also found that more auctions were scheduled across the combined capital cities this week, with 2,305 currently being tracked as opposed to 2,149 last week, 76.2 per cent of which were successful.
CoreLogic’s report follows on from the Reserve Bank’s decision to hold interest rates at 1.5 per cent, during which former RBA governor Glenn Stevens said that “general growth in housing prices had declined at the national level and across most capital cities”, and that the “number of auctions had declined and remained lower than a year earlier”.
Despite the RBA’s recent commentary, the report suggested that the recent strength in auction clearance rates, ongoing growth in home values, a rebound in dwelling approvals, and lack of new stock entering the market for sale could pique the RBA’s attention at its next committee hearing.