Saturday, August 8, 2015

FY2015 Building Approvals

Building approvals data this week was perhaps not as strong as it could have been to end FY2015: Regional Building Approvals a mixed bag
What the Conus Trend data is telling us is that the slide in Townsville continues while Cairns’ recovery remains at a very modest pace (and has slowed sharply in recent months). The Cassowary Coast, coming from a very low base, is also seeing only modest growth.
A look at the regional overview throws up a few points of interest related to Pete's comment on recent softer growth in Cairns:

 
That softness has shown up mostly on the north side and particularly Trinity Beach - Smithfield with the most recent months well below their average for the year. Trinity Beach - Smithfield still finished the year with by far the highest number of approvals of any SA2 area at 241.
 
The other point of note is that the stronger data for the last few months on the south side was actually because of a re-emergence of smaller unit developments rather than houses. There were 9 units for Cairns City in June following 14 in May at White Rock. As Rick Carr alluded in the most recent CairnsWatch despite much talk on larger unit developments there is still not much happening on the ground, or in final approvals it would seem.
 
Another way to look at the data is in the value of building approvals. I have no idea how reliable these estimates from ABS are for values but anyway this graph also includes alterations, additions and conversions for the residential component:
 
 
Non-residential will always be lumpy as will the unit component of residential. So I thought I would stick to the house sector and look at the average building value per house of approvals in recent years:

 
 
That doesn't appear to indicate any significant inflation trend in building costs. However this is derived from an average based on aggregates and a median would be preferable as with anything property relate as averages can be skewed by a small number of high value houses. Breaking that down further the average for Cairns North is only a bit over $5k above Cairns South for FY 2015.
 
A suburban breakdown by SA2 for the year shows a far larger spread but again this is where we have to be careful with skewed averages especially in areas with a low number of approvals in established suburbs near the hills and beaches. For what it's worth perhaps we can call this the Snob Scale:
 
New houses Average value
Earlville - Bayview Heights 4 $496,200
Whitfield - Edge Hill 7 $472,500
Brinsmead 7 $444,571
Kanimbla - Mooroobool 26 $429,146
Yorkeys Knob - Machans Beach 6 $421,550
Port Douglas 38 $420,608
Freshwater - Stratford 9 $384,044
Clifton Beach - Kewarra Beach 52 $370,588
Westcourt - Bungalow 1 $363,600
Woree 9 $351,644
Mount Sheridan 13 $348,808
Redlynch 69 $309,281
Manoora 2 $280,000
Bentley Park 31 $276,494
Trinity Beach - Smithfield 241 $274,979
Gordonvale - Trinity 47 $260,755
White Rock 17 $246,894
Edmonton 68 $244,449



For anyone interested in building costs BMT Quantity Surveyors have an online calculator for different types of buildings and also includes a cost adjustment for Cairns: Construction Cost Calculator

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