Residential construction declines, except for higher-density construction which has remained at higher levels
Housing market conditions in Sydney and Melbourne – especially among more expensive properties – have eased, according to the Reserve Banks of Australia’s latest Statement on Monetary Policy.
The report cited declining house prices in Sydney, while those in Melbourne have been relatively flat or falling over recent months. The number of properties sold through auction in both cities has increased over 2018, and the central bank also observed a rise in the number of auctions and a decline in clearance rates to 62% and 63% in Melbourne – a little below their decade averages. Meanwhile, it saw little change in housing prices in most other capital cities – but those in Hobart continued to grow strongly.
The central bank noted a decline in new dwelling construction last year, after a few years at high levels supported by low interest rates, strong population growth and higher housing prices in the eastern states.
“The recent decline in residential construction activity has been concentrated in detached housing, while higher-density construction activity has remained at high levels,” the reserve bank said.
With building approvals at higher levels than completions, the central bank said the pipeline of higher-density dwelling projects approved or are underway has remained close to historically high levels, driven by New South Wales and Victoria. “The dwelling investment pipeline should continue to support a high level of dwelling investment for some time yet,” it added.
