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1301.0 - Year Book Australia, 2004  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 27/02/2004   
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Contents >> Construction >> Residential building

Building approvals are a key indicator of future activity, as nearly all building activity must be approved by local and/or other authorities. Residential building is focused on the provision, upgrading and maintenance of dwelling units.

Most dwelling units are created from the construction of new houses and new other residential buildings (i.e. flats, apartments, villas, townhouses, duplexes, etc.). They can, however, also be created as part of alterations and additions to existing buildings (including conversions to dwelling units) and as part of the construction of non-residential buildings.

The number of total dwelling unit approvals experienced relatively stable growth between 1995 and 1998 (graph 19.7). Activity brought forward ahead of The New Tax System (July 2000) contributed to the increase and decrease between early 1999 and late 2000. Low interest rates and governments' expanded home owner schemes contributed to an increase in the number of dwelling units approved throughout 2001 and 2002.

19.7 DWELLING UNITS APPROVED: Trend estimates
Graph - 19.7 Dwelling units approved: Trend estimates


Residential building activity is dominated by the private sector. In 2002 this sector accounted for around 98% of new house approvals, a proportion largely unchanged from preceding years. The public sector is slightly more significant in the area of new other residential building work, although its share appears to be decreasing. In 2002 new other residential building work approved by the public sector accounted for 3% of approvals, compared to 6% in 2001.

The major component of dwelling unit approvals is new houses (table 19.8). In 2002 new house approvals accounted for 67% of total dwelling unit approvals.

19.8 DWELLING UNITS APPROVED

New houses
New other residential
dwelling units
Conversions
Total dwelling
units(a)

Private sector
2000
93,581
41,727
2,257
138,850
2001
102,802
40,962
1,653
146,221
2002
116,571
53,721
2,059
173,398
Public sector
2000
1,419
2,345
4
3,834
2001
1,519
2,509
103
4,220
2002
2,072
1,745
-
3,825
Total
2000
95,000
44,072
2,261
142,684
2001
104,321
43,471
1,756
150,441
2002
118,643
55,466
2,059
177,223

(a) The total includes non-residential buildings and alterations and additions to residential buildings.
Source: Building Approvals, Australia (8731.0).

New houses

The relationship between new house commencements and completions is illustrated in graph 19.9. Generally, during periods of downturn in new house construction activity, completions exceed commencements. In periods of growth the pattern is reversed.

The introduction of The New Tax System (July 2000) corresponded with a marked decline in new house commencements from 2000 to 2001. Subsequently, with a period of historically low interest rates, there has been a sharp increase in new house commencements.

19.9 NEW HOUSES COMMENCED AND COMPLETED: Trend estimates
Graph - 19.9 New houses commenced and completed: Trend estimates


New other residential building

Other residential building refers to structures other than houses, which are built for accommodation purposes. This includes buildings such as blocks of flats, units and apartments, and semi-detached houses, townhouses and the like.

In 2002 there was a 28% increase in new other residential buildings approved. Prior to 1996 approvals for semi-detached houses/townhouses, etc. was greater than that for flats, units and apartments. After 1996 the value of approvals for flats, units and apartments exceeded approvals for semi-detached houses, townhouses and the like. In 2002 flats, units and apartments contributed 63% of the value of total new other residential approvals (graph 19.10).

Graph - 19.10 New other residential dwelling units commenced


Value of residential building

Total approvals for new residential building was valued at $25,760m in 2002, increasing 24% from the previous year. The value of work done increased 31% over the same period to $24,844m (table 19.11).

19.11 VALUE OF RESIDENTIAL BUILDING WORK(a)

Approved
Work done


2001
2002
2001
2002
$m
$m
$m
$m

New residential buildings
New houses
14,596
17,341
13,098
17,051
New other residential buildings
6,168
8,419
5,871
7,792
Total
20,759
25,760
18,968
24,844
Alterations and additions to residential buildings(b)
3,614
4,074
3,787
4,345
Total residential building work
24,373
29,834
22,755
29,188

(a) Chain volume measures, reference year is 2000-01.
(b) Valued at $10,000 or more.
Source: Building Activity, Australia (8752.0); Building Approvals, Australia (8731.0).

Estimates of alterations and additions to residential buildings includes all approved building activity carried out on existing residential buildings, valued at $10,000 or more. Additions and alterations to residential buildings, is of increasing value (even though proportionally small compared to new residential buildings). Work done on alterations and additions to residential buildings was valued at $4,345m in 2002, representing an increase of 15% since 2001.

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