Building Approvals for Private Houses Continue to Perform Strongly in Victoria and Australia

Sep 30, 2020 3-minute read

Australia • Building-Approvals • Covid-19

Data: ABS - 8731.0 - Building Approvals, Australia

According to the ABS, “Statistics of building work approved are compiled from: - permits issued by local government authorities and other principal certifying authorities; - contracts let or day labour work authorised by commonwealth, state, semi-government and local government authorities; and - major building approvals in areas not subject to normal administrative approval e.g. building on remote mine sites.”

Some key definitions from the ABS:

“Public vs. Private: Building ownership is classified as either public or private sector and is based on the sector of the intended owner of the completed building at the time of approval. Residential buildings constructed by private sector builders under government housing authority schemes are classified as public sector when the authority has contracted, or intends to contract, to purchase the building on or before completion.”

“Dwelling: dwelling is a self-contained suite of rooms, including cooking and bathing facilities, intended for long-term residential use. A dwelling may comprise part of a building or the whole of a building. Regardless of whether they are self-contained or not, rooms within buildings offering institutional care (e.g. hospitals) or temporary accommodation (e.g. motels, hostels and holiday apartments) are not defined as dwellings. Such rooms are included in the appropriate category of non-residential building approvals. Dwellings can be created in one of four ways: through new work to create a residential building; through alteration/addition work to an existing residential building; through either new or alteration/addition work on non-residential building; or through conversion of a non-residential building to a residential building.”

“House: A detached building primarily used for long term residential purposes consisting of one dwelling unit. Includes detached residences associated with a non-residential building, and kit and transportable homes.”

Trends for Victoria and Australia

The first plot shows the number of building approvals for private dwellings in Victoria. As the plot shows, despite the restrictions and the economic impacts of the second wave of Covid-19 in Victoria, the trend for building approvals continues to follow the historical trajectory.

Here, I have shown the approvals for houses and dwellings excluding houses (e.g. apartments). For a detailed definition please see the top section of the post or the ABS website.

Overall, there is no significant long-term change in the trend and Covid-19 has not had a major impact on the time series for biulding approvals when it comes to houses and as the graph shows, the number of approvals continued to be higher than last year. However, the trend for dwellings excluding houses had another value substantially lower than 2019.