building approvals reach record highs
Dwelling approvals increased by 1.3 per cent in trend terms this January, according to the Australian Bureau of Statistics' latest release. This is the eighth month of consecutive gains and a new record for building approvals over a 12-month period.
Builders in Perth will be looking forward to a well-established pipeline of work in 2015 if these approval numbers are anything to go by.
"We are witnessing record activity in building approvals, and this points to 2015 being a year of high activity in residential construction," said Nick Proud, the Property Council of Australia's residential executive director.
The Property Council of Australia reported that approvals had reached 203,182 in the year to January, up from a record-breaking December in 2014, which was the first time approvals had broke 200,000 over the course of 12 months.
However, the Property Council reports that the challenge facing the industry and policy makers is ensuring that all of these approvals flow through to actual dwelling commencements. There have been calls to streamline the building process by removing red tape - saving builders time, and saving consumers money.
In order for the property industry to continue being such a positive influence on the economy, it's important that the sector is supported by government.
It was also pointed out by the Property Council that overseas investment is often the kicker that gets commencements over the line. This highlights the need to make sure that future policy decisions channel foreign investment in Australian real estate in the right directions, rather than shutting it out.
The benefit to all Australian homeowners and renters is clear as housing stock increases - easing price concerns in the real estate market. However, those considering a new two storey home in Perth, or a demolish and build project, are in a unique and favourable position. As established homes gain capital value - a chief driver of housing unaffordability - newly built homes are subject to a fixed-price contract agreed to by builder and client, meaning that there is no intangible benefit that is being paid for in the purchase price.