Australians seemed to be demanding more apartments over the last months of 2019, as the latest data from the Australian Bureau of Statistics show a considerable spike in building approvals in November.
In seasonally-adjusted terms, the overall number of dwelling units approved for construction in the month rose by 11.8%, boosted by a 22.6% growth in apartment approvals.
The total number of approvals also increased in trend terms, albeit at a slower rate of 0.8%. The unit market registered a 2.9% increase in approvals.
"The rise was driven by approvals for private-sector dwellings excluding houses. However, private-sector houses fell," said Daniel Rossi, director of construction statistics at the ABS.
The seasonally adjusted growth in approvals in November was the highest since March 2019, said Tom Devitt, an economist at the Housing Industry Association (HIA).
"The improvement in approvals in November is consistent with other leading indicators which show that the market started to stabilise around April 2019," he said.
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Amongst all states, New South Wales gained the biggest increase in approvals, thanks to the surge in the demand for apartments. Approvals in New South Wales jumped 52.8% on seasonally-adjusted terms.
Building approvals also rose in South Australia and Queensland, albeit at a significantly slower pace. All other states reported declines, with Tasmania posting the biggest decline at 11.5%.
On an annual basis, however, Australia's building approvals dropped by 20%. However, the monthly results seem to signal that the floor in housing demand is being reached, said Maree Kilroy, an economist at BIS Oxford Economics.
"The freeing up of credit, as seen in recent new loan growth, is starting to have a positive effect on new dwelling demand with the increased churn of established dwellings encouraging upgraders towards new construction," she said.
The infographic below shows the seasonally-adjusted approval growths in each state:
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