Although house building in Canberra remains at low levels, unit construction continues to be relatively strong.

House building levels in the ACT remain subdued with unit development continuing to provide the bulk of residential construction activity.

Latest Bureau of Statistics data shows that just 59 houses were approved for building in the ACT in October, the lowest monthly total since January. October’s total was well below the 109 approved during the same month last year and is the lowest number of October approvals recorded by the bureau since 2001.

Just 889 houses were approved for building in the ACT in the first 10 months of this year – 591 fewer or 40 per cent down on the 1480 houses approved in the same period last year.

Although house building remains at low levels, unit construction remains relatively strong. There were 145 units approved for building in October which, although it was the lowest total since March, was well over double the number of houses approved.

Historically high levels of apartment construction are a positive for the Canberra economy although supply is typically likely to move ahead of demand over the short term.Dr Andrew Wilson

A remarkable 2816 units have been approved for building in the ACT this year so far – 1032 more or 58 per cent higher than the 1784 approved in the same period last year.

Historically high levels of apartment construction are a positive for the Canberra economy although supply is typically likely to move ahead of demand over the short term.

Low levels of new housing, however, is not welcome news for tenants with rental vacancy rates for houses in Canberra remaining tight. The latest Domain vacancy rate for houses shows that house rental vacancies eased slightly over November but remain low at 1.7 per cent.

Reflecting recent high levels of construction, apartment rental vacancy rates rose from 3.1 per cent to 3.5 per cent over the month, providing more choice for tenants.

Dr Andrew Wilson is Domain Group Senior Economist

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