ABS reveals government building package is causing a surge in new houses

New figures show federal government stimulus packages are spurring on a surge of new houses being built.

The ABS has revealed a rise in the number of new dwellings being approved. Picture: Patrick T. Fallon/ Bloomberg

Government housing schemes such as HomeBuilder are causing a surge in the number of newly approved residential properties being built across Australia.

Latest figures from the Australian Bureau of Statistic shows total dwelling approvals across both commercial and residential markets rose 2.6 per cent in November compared with the previous month.

The rise in new building approvals is being fuelled by additional stimulus measures implemented by federal and state governments in order to boost economic activity during the downturn sparked by the coronavirus pandemic.

The rise in new building approvals is being fuelled by additional stimulus measures. Picture: Supplied

Private sector housing is the main influence causing the rise in the economic indicator, with $5.8bn worth of new residential buildings being committed over the month.

Residential housing approvals have risen for five consecutive months and at levels not seen since December 1999.

Housing Industry Association economist Angela Lillicrap said the low interest-rate environment was also fuelling the increase in dwelling approvals.

“HIA New Home Sales data suggests that detached house building approvals will continue to be strong over the coming months,” she said.

Low interest rates are also fuelling the uptake in new houses being committed for construction. Picture: Keryn Stevens

“The extension of HomeBuilder at the end of November is not a factor in this month’s result but will see the strength in detached house approvals extend into 2021.”

The HIA economist also noted apartment markets were likely to remain constrained while population growth was slow.

ABS director of construction statistics Daniel Rossi said stimulus measures were the main driver for the surge.

“Approvals for private houses have surged 40 per cent since June. Federal and state housing stimulus measures and low interest rates have resulted in strong demand for detached dwellings,” Mr Rossi said.

“Approvals for private houses rose 6.1 per cent in November, while dwellings excluding houses remain at subdued levels, falling 3.9 per cent.”

Private sector housing is the main driver in the rise of dwelling approvals. Picture: Supplied

South Australia and Queensland experienced the largest rises in new dwellings, while Western Australia, Tasmania and Victoria all fell back.

Despite a rise in new housing, ongoing falls in non-residential building approvals continue to dent the total value of new projects and fell 27.4 per cent on the previous month.

The ABS also recorded a 5.6 per cent monthly rise in alterations and additions to existing residential structures.

The federal government’s HomeBuilder scheme provides $15,000 grants to owner-occupiers who are looking to build a new property or conduct substantial renovations to an existing dwelling. It is available up until March 31.