FOLLOWING a revised decrease of 5.2 per cent in April, the number of new dwellings approved in May increased by 2.4 per cent, in seasonally adjusted terms, according to the latest figures released last week by the Australian Bureau of Statistics (ABS).
A total of 19,414 dwellings were approved in May, compared to seasonally adjusted totals of 18,964 in April and 20,003 in March. When compared to the same month last year, the number of dwellings approved in May 2015 was up by 17.6 per cent, in seasonally adjusted terms.
In seasonally adjusted terms, dwelling approvals increased in Victoria (up 11.0 per cent to 6,536 dwellings), New South Wales (up 8.8 per cent to 5,374), Queensland (up 3.6 per cent to 3,426) and Western Australia (up 0.2 per cent to 2,584).
In South Australia, a total of 763 dwellings were approved in May (a decrease of 9.9 per cent compared to the previous month), and in Tasmania, a total of 270 dwellings were approved in May (down 32.6 per cent).
In seasonally adjusted terms, 9,265 private sector houses were approved in May, compared to 10,116 in April. A total of 9,954 private sector dwellings excluding houses were approved in May, which was a 16.6 per cent decrease when compared to April's result of 8,538.
The seasonally adjusted estimate of the value of total building approved was up by 2.1 per cent in May, following a fall of 3.1 per cent in the previous month. The value of residential building increased by 3.3 per cent, following a fall of 3.7 per cent in the previous month. The value of non-residential building decreased by 1.1 per cent and has fallen for two months.
HIA Senior Economist, Shane Garrett, said that during May, dwelling approvals recorded their third highest monthly total on record.
"While it is positive to see improved levels of approvals, the distribution of growth was uneven with multi-units increasing significantly during the month and detached house approvals falling back," Mr Garrett said.
Mr Garrett said the new figures indicate there will be a solid pipeline of new home building during the second half of 2015.
"However, the recent strengthening of price pressures in several markets indicates that the supply of new homes will need to stay at elevated levels in order to fully address demand," he added.
"This onus is very much on policymakers here. They must rectify the bottlenecks in the planning system, redress the excessive fees and charges on new residential developments and ensure that the pipeline of residential land will meet the ongoing community demand for new homes."
Chief Economist of Master Builders Australia, Peter Jones, said the fall in approvals for detached houses signals that impediments to more greenfield land release at state and local government level may be holding back a response to increased demand for detached housing.
More information is available from the Australian Bureau of Statistics website at <http://www.abs.gov.au/>.