Westpac is confident that home building approvals will remain at historically high levels despite predictions of a retracement in the coming months.
The latest figures reveal that new home building approvals reached their highest-ever monthly level in November last year.
According to the Australian Bureau of Statistics, 18,245 new homes were approved during November, almost 3.0 per cent higher than the previous record, which was set in August 1994.
Total approvals in November rose by 7.5 per cent on the previous month, and were 10.1 per cent higher compared to 12 months ago.
Westpac senior economist Elliot Clarke said that overall, the November figures point to a strengthening of the residential construction work pipeline for 2015 and support aggregate activity in the major capital cities.
“It is likely that we will see a partial retracement of the recent approvals surge in coming months, but that will still leave approvals at a historically high level,” he said.
As is typically the case, the November figures were driven by unit approvals. The number of private unit approvals increased by 16.7 per cent in November following a 31.6 per cent surge in October.
Annual growth for this series is more modest, but still strong, at 19.1 per cent, Mr Clarke said.
“As for October, the strength in the private units component was driven by strong growth in Victoria: a 19.7 per cent monthly gain for total approvals (which followed on from a 26.6 per cent gain in October) seeing annual growth surge to 45.3 per cent,” he said.
Unit approvals in Victoria are now up 91.1 per cent.
Elsewhere conditions are softer.
NSW saw a 1.4 per cent decline in total approvals in November, down 4.4 per cent for the year.
In Queensland, while total approvals rose 5.7 per cent in the month, approvals remain 8.7 per cent lower than a year ago.
Across in WA, approvals rose 1.2 per cent in November and are 7.0 per cent higher than a year ago.
“It is worth highlighting that, beneath these modest headline outcomes, is rapid growth in unit approvals, 239 per cent for the year in WA and 45 per cent for the year in Queensland,” Mr Clarke said.
“Growth in NSW has slowed considerably, but it is still robust at 24 per cent over the year,” he said.