Total Dwelling Approvals Down in July
Total dwelling approvals in July fell again, this time by 8.6%. Building approvals have been falling since the peak back in March where Australia saw approvals climb by 19.1% in February and a further 16% in March. Overall approvals for the 2021 financial year were up 42.8% from the previous year. This surge in new building approvals has improved the employment levels in the construction industry however is upward pressure on residential construction costs.
National residential constructions costs, according to CoreLogic, have increased in the last quarter by 1.4%. This growth rate outpaced the Consumer Price Index CPI that grew by 0.8% in the same period. The latest Cordell Housing Index Price (CHIP) highlights an annual increase of 3.9% with Queensland leading the way with the highest rate of cost increases in Australia at 4.7%.
While total dwelling approvals were recorded down over the month of July total approvals for the year remain strong. This increased number of approvals so far for 2021 has created a substantial pipeline of residential construction work ahead which will continue to put pressure on construction costs which will impact the rising costs of new homes and renovations.