Latest ABS figures on new home building approvals indicate that activity across the Hunter performed strongly in 2017.
In total 4,618 approvals were issued for new dwellings across the Hunter, compared to 4,293 in 2016, an increase of 8 per cent on already elevated levels.
Much of the heavy lifting for the residential sector continues to occur in the Lower Hunter, with the local government areas of Lake Macquarie, Newcastle and Maitland continuing to be the top 3 locations for approvals, accounting for over 77% of total dwelling approvals.
Pleasingly over the last year it was in regional locations that the largest percentage increases in total dwelling approvals occurred. Dungog was the strongest, up 49%, followed by Cessnock, up 17%, and Scone, up 13%. Lake Macquarie took out the title of ‘biggest mover’ increasing their housing approvals by 134 dwellings over 2016.
The performance of new home building approvals across detached new homes and multi-unit approvals unfortunately fluctuated in 2017. Accounting for 61 per cent of all approvals detached house approvals decreased by 3 per cent compared to the 2017 calendar year, while multi-unit approvals, increased by 29 per cent over the same period.
Despite the healthy levels of residential construction activity the volume of residential lot transactions in the Hunter appears to have dipped sharply according to the latest HIA-CoreLogic Residential Land Report.
Preliminary results indicate that vacant residential lot sales fell by 30% in the 6 months to September 2017 when compared to the same period a year earlier. This significant reduction in land sales places the Hunter as the 6th weakest regional NSW market for land sales.
The easing in the volume of Hunter land sales is concerning as land sales provide an indication of future residential house construction. The reduction in the number of lots sold means that the potential for new house building may be more constricted going forward.
Equally concerning is the fact that the median lot price in the Hunter is now the highest in the history of the report at $230,000, though some of this can be accounted by the slight increase in the median lot size which was 643 square metres in the September 2017 quarter.
Nationally Sydney remains the most expensive land market on a per sqm basis. During the September 2017 quarter, the price of land there was estimated at $1,051 per sqm in comparison to the Hunter which sits at $357. Despite the relative affordability of land locally the Hunter remains the 5th most expensive regional market in Australia.
Despite this decline, and the fact that the housing cycle has passed the peak, with strong consumer confidence locally and interest rates predicted to remain at historically low levels for some time, the Hunter residential construction sector should continue to remain buoyant in early 2018.
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HIA Executive Director – Hunter