1301.0 - Year Book Australia, 2004

ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 27/02/2004

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Contents >> Construction >> Residential building

Building approvals are a key indicator of future activity, as nearly all building activity must be approved by local and/or other authorities. Residential building is focused on the provision, upgrading and maintenance of dwelling units.

Most dwelling units are created from the construction of new houses and new other residential buildings (i.e. flats, apartments, villas, townhouses, duplexes, etc.). They can, however, also be created as part of alterations and additions to existing buildings (including conversions to dwelling units) and as part of the construction of non-residential buildings.

The number of total dwelling unit approvals experienced relatively stable growth between 1995 and 1998 (graph 19.7). Activity brought forward ahead of The New Tax System (July 2000) contributed to the increase and decrease between early 1999 and late 2000. Low interest rates and governments' expanded home owner schemes contributed to an increase in the number of dwelling units approved throughout 2001 and 2002.

19.7 DWELLING UNITS APPROVED: Trend estimates
Graph - 19.7 Dwelling units approved: Trend estimates

Residential building activity is dominated by the private sector. In 2002 this sector accounted for around 98% of new house approvals, a proportion largely unchanged from preceding years. The public sector is slightly more significant in the area of new other residential building work, although its share appears to be decreasing. In 2002 new other residential building work approved by the public sector accounted for 3% of approvals, compared to 6% in 2001.

The major component of dwelling unit approvals is new houses (table 19.8). In 2002 new house approvals accounted for 67% of total dwelling unit approvals.

19.8 DWELLING UNITS APPROVED
		New houses	New other residential dwelling units	Conversions	Total dwelling units(a)

Private sector
	2000	93,581	41,727	2,257	138,850
	2001	102,802	40,962	1,653	146,221
	2002	116,571	53,721	2,059	173,398
Public sector
	2000	1,419	2,345	4	3,834
	2001	1,519	2,509	103	4,220
	2002	2,072	1,745	-	3,825
Total
	2000	95,000	44,072	2,261	142,684
	2001	104,321	43,471	1,756	150,441
	2002	118,643	55,466	2,059	177,223

(a) The total includes non-residential buildings and alterations and additions to residential buildings.

Source: Building Approvals, Australia (8731.0).

New houses

The relationship between new house commencements and completions is illustrated in graph 19.9. Generally, during periods of downturn in new house construction activity, completions exceed commencements. In periods of growth the pattern is reversed.

The introduction of The New Tax System (July 2000) corresponded with a marked decline in new house commencements from 2000 to 2001. Subsequently, with a period of historically low interest rates, there has been a sharp increase in new house commencements.

19.9 NEW HOUSES COMMENCED AND COMPLETED: Trend estimates
Graph - 19.9 New houses commenced and completed: Trend estimates

New other residential building

Other residential building refers to structures other than houses, which are built for accommodation purposes. This includes buildings such as blocks of flats, units and apartments, and semi-detached houses, townhouses and the like.

In 2002 there was a 28% increase in new other residential buildings approved. Prior to 1996 approvals for semi-detached houses/townhouses, etc. was greater than that for flats, units and apartments. After 1996 the value of approvals for flats, units and apartments exceeded approvals for semi-detached houses, townhouses and the like. In 2002 flats, units and apartments contributed 63% of the value of total new other residential approvals (graph 19.10).

Graph - 19.10 New other residential dwelling units commenced

Value of residential building

Total approvals for new residential building was valued at $25,760m in 2002, increasing 24% from the previous year. The value of work done increased 31% over the same period to $24,844m (table 19.11).

19.11 VALUE OF RESIDENTIAL BUILDING WORK(a)
		Approved		Work done

		2001	2002	2001	2002
		$m	$m	$m	$m

New residential buildings
	New houses	14,596	17,341	13,098	17,051
	New other residential buildings	6,168	8,419	5,871	7,792
	Total	20,759	25,760	18,968	24,844
Alterations and additions to residential buildings(b)		3,614	4,074	3,787	4,345
Total residential building work		24,373	29,834	22,755	29,188

(a) Chain volume measures, reference year is 2000-01. (b) Valued at $10,000 or more.

Source: Building Activity, Australia (8752.0); Building Approvals, Australia (8731.0).

Estimates of alterations and additions to residential buildings includes all approved building activity carried out on existing residential buildings, valued at $10,000 or more. Additions and alterations to residential buildings, is of increasing value (even though proportionally small compared to new residential buildings). Work done on alterations and additions to residential buildings was valued at $4,345m in 2002, representing an increase of 15% since 2001.