Victorian apartment approvals plunge to lowest level since 2005

Job Keeper Hot Air Balloon Pic

Apartment approvals, particularly in Melbourne’s CBD, have plunged. Picture: Alex Coppel

Victoria’s home construction pipeline is set to plunge.

Latest Australian Bureau of Statistics figures show the value of building jobs approved fell $752m to $1.951 billion from March to April.

Development and construction industry groups have “great concern” for the impact to the apartment sector, with the figures showing just 262 apartments got the green light — the lowest level since September 2005.

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Property Council of Australia Victorian executive director Danni Hunter said the plunge, particularly compared to more robust figures in NSW, was a warning tax changes announced in the state budget targeting developers were “irresponsible”.

“While a slowdown in approval numbers was expected due to the end of HomeBuilder, such a retraction in approvals for Victoria relative to New South Wales comes as a great concern to the sector and the broader Victorian economy,” Ms Hunter said.

“With Victoria currently going through its fourth lockdown, we are certainly not out of the woods when it comes to COVID-19 and the economic harms it can bring. This further confirms that this is the wrong time for the Victorian Government to increase and introduce new taxes on property and construction.”

Melbourne from the air

Fewer cranes are expected to be seen across Melbourne’s skyline.

The state government will from next month offer stamp duty cuts of 50 per cent for new apartments sold a year after they were built, or 100 per cent for those that have lingered for sale more than a year, in a bid to reduce the volume of empty apartments in the CBD.

Apartments wasn’t the only sector to experience a fall, with the number of houses given the nod for construction also dropping by 231 (5 per cent) to 4437.

Housing Industry Association economist Angela Lillicrap said the drop was to be expected following a 4671 house record set in March, but noted Victoria could see figures sustained in the thousands for a few months yet as further purchases driven by HomeBuilder were approved.

“We are expecting another couple of months of elevated levels, though this is potentially the peak,” Ms Lillicrap said.

“It is still a very elevated level, only slightly below the month before, which was a record.”

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Housing approvals remain near record high levels.

She added Victorian renovation activity also remained strong, in part buoyed by HomeBuilder payments for larger renovations — but also by repeated lockdowns enticing many to undertake updates to make their homes more comfortable as they spent more time in them.

There was potential the state’s fourth lockdown could drive more to consider a reno.

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