More Australians are choosing to live in apartments and townhouses rather than houses, but rising rates are likely to impact new builds this year.
New Australian Bureau of Statistics data reveals a number of large apartment developments approved in NSW and Victoria has prompted a 56.6 per cent increase in non-house dwelling approvals in December.
Around the country, the number of total dwellings – including houses, apartments and townhouses – approved across the country rose 18.5 per cent in the last month of 2022 following November’s 8.8 per cent decrease.
Despite the strong monthly result, approvals were down 4.3 per cent quarter to quarter.
The number of houses approved tracked downwards, falling by 2.3 per cent.
ABS head of construction statistics Daniel Rossi said the figures showed less houses were being approved in favour of apartments, townhouses and row houses.
“The increase … was led by a sharp rise in approvals for private sector dwellings excluding houses. (This) was driven by a number of large apartment developments approved in NSW and Victoria,” Mr Rossi said.
Total NSW dwelling approvals rose 48.4 per cent from November, followed by a 20.7 per cent increase in Victoria.
Tasmanian dwelling approvals were down 49.7 per cent.
In terms of houses, there was an increase in approvals in Western Australia (8.2 per cent), while NSW witnessed a decrease of 4.2 per cent.
ANZ senior economist Adelaide Timbrell said despite the strong monthly result, approvals were likely on a downward trend.
“While Australia’s strong expected net migration through this year will limit the total decline in building approvals, falling home prices and rising rates will reduce appetite for new dwelling developments,” she said.