Building approvals should help address under supply in housing market

Industry thriving: ABS data shows that building approvals across the state have returned to pre-pandemic levels. Photo by Cath Grey

Cobram, like most of Victoria, has experienced an under supply of residential units and houses for some time.

While this has helped property owners, in terms of property values and rental returns, those looking to move to the area often struggle to secure something without looking further afield.

Recent data from the Australian Bureau of Statistics has revealed that the number of new residential building approvals statewide has returned to pre-pandemic levels as the building and construction industry continues to lead the state’s COVID-19 recovery.

This means things are looking up for tree-changers considering towns such as Cobram, and existing residents looking to build or purchase locally.

Master Builders Victoria chief executive Rebecca Casson said Victoria passed 70,463 new residential building approvals in the 12 months to November 2021 – the highest level for three years.

“Our state has not seen yearly residential building approval totals exceed 70,000 since 2018,” Ms Casson said.

“This demonstrates high levels of confidence and demand from the private sector as Victorians began to emerge out of lockdowns and into some form of normality.”

Ms Casson said the proportion of building approvals for multi-unit buildings had picked up slightly from the previous month, accounting for 31 per cent of all building approvals in the 12 months to November 2021.

With international borders reopening, Ms Casson said to expect steady growth in Victoria’s population this year, which would further influence the positive growth of multi-unit building approvals.

“Victoria’s building and construction industry continues to play a large part in supporting our state’s population and economy,” Ms Casson said.

“It is evident that the building and construction industry is important to the overall health of the Victorian and national economy.

“Recent GDP data indicated that during the September 2021 quarter, Australia’s economy shrank by 1.9 per cent, reflecting the effects of lockdowns in Victoria and NSW.

“However, residential building has been one of the strongest parts of the economy and expanded by 11.4 per cent in the last year.”

Real Estate Institute of Victoria figures show the median house sale price in Cobram is now $333,000, which is a 1.5 per cent increase from the previous quarter.

It is, however, significantly less than the state regional median house sale price of $570,000, which also represents an increase from the previous quarter (2.4 per cent)

This should help attract interest in the Cobram area from owner occupiers and investors who can acquire a property at a more reasonable price than in many other parts of the state.

Victoria saw 64,785 building approval works completed in the 2020-21 financial year, generating $25.7 billion of work in the 12 months to September 2021.

Ms Casson said building and construction work completed was equivalent to 12.05 per cent of the Victorian economy as of the 2020-21 financial year.