Housing Construction Sees a Boost with Apartment Approvals Surge

2 min read | December 02, 2024 12:01 PM AEDT | By Team Kalkine Media

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Housing Construction Sees a Boost with Apartment Approvals Surge — Image source: shutterstock

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Highlights

Apartment and townhouse approvals rise sharply in October.

Total housing approvals climb compared to the previous month.

Year-on-year declines in approvals end after 28 months.

The housing sector experienced an uplift in October, driven by a significant rise in approvals for apartments, townhouses, and semi-detached homes. The Australian Bureau of Statistics (ABS) released data showing total approvals increased by 4.2%, despite a decline in standalone house approvals. This marks a positive shift for the sector, particularly after a long period of subdued activity.

Approvals for attached dwellings, such as apartments and townhouses, jumped by 22.4% on a seasonally adjusted basis, bringing the monthly total to 6130. This represents the highest number since May last year. However, detached home approvals dropped by 5% to 9368. Combined, the total approvals for October reached 15,498.

These figures highlight the importance of multi-unit developments in bolstering overall housing activity. While monthly data often reflects project-specific fluctuations, the broader 12-month view provides a clearer picture. Over the year ending October, total housing approvals reached 168,164, effectively matching levels seen during the same period last year. This ended a prolonged 28-month streak of year-on-year declines.

The surge in approvals for attached homes reflects shifting housing preferences, with urban areas and high-density developments gaining momentum. Developers are capitalizing on growing demand for compact housing solutions, particularly in cities where land availability remains a challenge. This aligns with broader trends in urban development and population growth.

Companies in the construction and building materials sector may see varied impacts from this data. Notable players include James Hardie Industries (ASX:JHX), which specializes in building products for residential and commercial properties, and CSR Limited (ASX:CSR), a key supplier of construction materials. These companies are often directly linked to trends in housing approvals and demand for building materials.

The October rebound signals a potential turning point for the housing sector, especially if the momentum in attached housing approvals continues. While standalone home approvals remain subdued, the growth in multi-unit developments could help balance the market.

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