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Boom, squeeze and flood: the housing cycle moves to units

Business

First came the wave of interstate migrants into Queensland, then the housing boom and rental squeeze and now a new trend has shown up in official data.

 

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Figures from the Australian Bureau of Statistics showed there was a 20 per cent jump in housing approvals in Queensland, but the detail showed a flood of unit approvals, up 47 per cent.

Nationally, the total number of dwellings approved rose a far more sedate 3.6 per cent in seasonally adjusted terms in November, following a 13.6 per cent fall in October.

The overall rise in Queensland of 20 per cent was only beaten by Tasmania’s 40 per cent increase and economists said it was related people moving in to take advantage of the collapse of rental supply.

This was supported by the data showing a big increase in approvals for units.

Approvals for private sector houses rose in Queensland (7.4 per cent).

The ANZ said the nation-wide increase was stronger than expected, but it was not necessarily the beginning of an upward trend because total building approvals were still 10.5 per cent lower in November than September, and 30.1 per cent lower than the peak in April.

“The increased popularity of working from home may support approvals in the short term, as could higher savings rates if Omicron continues to affect spending,” ANZ’s Adelaide Timbrell said.

“But there are bigger risks to building approvals looking further out, in particular higher interest rates.

“A jump in units of 9.7 per cent month-on-month in November was behind the positive monthly result, mostly driven by strong unit growth in Victoria (+28.8 per cent), Queensland (+47.4 per cent) and South Australia (+65.7 per cent)

House approvals in Queensland were only up 7.4 per cent.

Housing Industry Association economist Nick Ward agreed the rental squeeze was a factor in the jump in unit approvals, however he said that the HIA did not expect interest rates to start rising until 2023.

 

 

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