Property Market Information: Detached home construction commitments growing

By the resi financial blog team, 28 July 2014

Property Market Information: Detached home construction commitments growing

The latest release from RP Data has highlighted the rising strength of Australia's property market across the nation, with the increase of dwelling approvals in the first quarter of 2014 promising an overall increase in housing construction strength - setting the precedent and pushing the market even further into development. In fact, there was an 8.7 per cent increase in approval activity over the March 2014 quarter, with a 22.2 per cent growth over the same time 12 months earlier. 

RP Data Research Analyst Cameron Kusher said the strong correlation between approvals and commencements highlighted the fact that these investments were actually being followed through, rapidly going from planning to construction and finally availability on the market. This flow on benefit is essential for the continued growth of the nation's economy as a whole, especially within the material and labour markets. 

Furthermore, he highlighted how detached homes were more reliable as investments than multi-unit developments, which could offer insight into the best route to take for future purchases. 

"Within the multi-unit sector, a level of presales is typically needed before construction commences and then myriad financing issues can arise as construction progresses. There are many examples of high profile unit developments where earthworks commenced, however, the actual structural construction never progressed or was substantially delayed," said Mr Kusher in a July 24 statement.

"What is interesting is that while house completions often reach, or at least become close to the previous peaks in house approvals, the same can't be said for units where we will often see a spike in unit approvals and at some later date there will be a lower spike in unit completions." 

If you're interested in purchasing property, begin investigating the detached home market for land lots in order to find the perfect location for your dwelling construction project to begin. 

Categories: Home Loans, Personal Finance, Property Investment