While building approval levels in Australia have softened recently, apartment construction continues to provide encouraging activity outcomes in most state markets.

Dr Andrew Wilson, Senior Economist and National Research and Development Manager for international property and construction consultants Davis Langdon pointed out that Australian Bureau of Statistics building approval figures showed a significant and sustained revival in apartment construction.

“This began in Victoria late in 2009 and has continued in other states through 2010 and is providing a shining light for the building industry,” said Dr Wilson.

“Apartment construction activity growth in 2010 is being driven by expeditious and facilitating state Government planning schemes, inner-urban living preferences and moves by developers to tap into entry-level consumers with efficient open-living style floor plans.”

The ABS figures showed apartment construction activity in 2010 for Australia is 67% above the levels recorded for the same period in 2009.

All state markets with the exception of South Australia have recorded significant rises in the number of new apartments approved in 2010.

“New South Wales leads the field in this activity explosion with an increase in apartment approvals in the first four months of 2010 of 124% compared to the same period in 2009,” said Dr Wilson.

“Victoria has had an increase of 36%, Queensland 57%, and Western Australia 175%. Only South Australia has recorded a fall in comparative activity with apartment approvals in 2010 declining by 51% compared with 2009.

“High-rise apartment activity is the significant contributor to the 2010 breakout in apartment construction with 51% of all apartments approved in 2010 in Australia being for four storey and above developments.

“Western Australia leads the way with 78% of all apartments being high-rise projects; Victorian had 66%, Queensland 50%, South Australia 35% and New South Wales 32%.

“Continued growth in this sector can be expected, particularly as financial markets unfreeze and risk aversion moderates as a consequence of accelerating growth in the general economy.”

For further information, contact Meaghan Jones on +61 3 9933 8800 or email mjones2@davislangdon.com.au