- Australian residential building approvals in high-rise complexes are increasing again.
- Strong population growth, affordability constraints for larger dwellings and commercial considerations for developers all help explain continued strength in approvals.
- ANZ Bank says this should help support construction activity through the remainder of the year.
For anyone living in Sydney, Melbourne and Brisbane, one only has to look out the window to see Australia’s high-rise apartment boom still has a long way to run yet.
Cranes are everywhere, nearly outnumbering completed apartment towers in many different locations.
Well, while some might believe it to be impossible, there may be even more cranes to come.
Just take a look at the chart below from ANZ Bank for evidence:
It shows residential building approvals for townhouses, low-rise and high-rise apartment complexes on an annualised basis.
After falling in recent years, approvals in the latter category are now starting to rebound again.
“If we look through the monthly volatility, underlying building approvals are still solid,” says Daniel Gradwell, senior economist at ANZ Bank.
“In particular, the high-rise apartment sector is still trending upwards.
“We had previously noted that townhouses have been a key driver of strength, and while this is still the case in Victoria, more broadly it is the high-rise sector currently supporting activity.”
Gradwell says that even with so much high-rise construction underway, there is still a tremendous backlog of work yet to come, something he says should support construction activity through the remainder of the year.
Strong population growth, affordability constraints for larger residential dwellings, soaring land costs and commercial considerations for developers all help explain the continued strength in high-rise activity.
After decades of building out not up, it appears Australia’s residential construction outlook has turned full circle.