HIA Economics today released an updated analysis of building approvals by region and type which can be downloaded here.

The updated analysis outlines five categories of building approvals, ranging from detached houses at one end to units of four or more storeys at the other end. It also includes analysis of the relative performance of these five building approvals and the implications for new home construction in 2017.

The analysis found ABS Building Approvals for Australia peaked in October 2015 and have subsequently held up at extremely high levels by historical standards. This means the cyclical decline in building approvals has been modest to date, with total seasonally adjusted building approvals only 3.8% lower in 2016 than in 2015.

While building approvals peaked in late-2015, HIA Economics predicts total building approvals to still be over 200,000 in 2017. As the down cycle in building approvals intensifies though, high density dwellings are expected to carry the burden of deceleration while detached and semi-detached dwellings are likely to fare better.

The Australian Capital Territory, South Australia and New South Wales all recorded increases in total building approvals in 2016.

Approvals for semi-detached, row or terrace houses/townhouses performed strongly in 2016 thanks to the key markets for this form of housing in the Australian Capital Territory, Victoria and Queensland. HIA Economics expects this will be a segment of the new home building market to watch in 2017.

The proportion of detached house approvals compared to multi-unit approvals was 51.2% in 2016, a slight reversal on the previous majority share held by multi-units.

Overall HIA Economics maintains its long held outlook for continued healthy levels of new home construction in 2016/17, and to a lesser extent in the calendar year 2017, as the profile for ABS Building Approvals is consistent with these forecasts.