Canberra building approvals have plunged to a 10-year low, driven by a slump in new apartment approvals.
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Canberra experienced an apartment boom in 2017 and 2018, partly off the back of a series of major Geocon apartment buildings in the city and town centres.
This year, the pace has slowed to a near stop. In 2018, approvals were granted for 4452 new apartments. In the first eight months of 2018, the number was 3265. In the first eight months of this year, approvals were granted for 1298 new apartments, the latest Australian Bureau of Statistics data shows.
While many of those approved apartments are still being built or planned, a long list of projects is also in the planning or design phase, including apartment buildings that are supposed to lead the promised rejuvenation of Northbourne Avenue with high-density living.
As well, developer Barry Morris plans 700 apartments on City Hill, and another 414 at Manuka on the former Stuart Flats public housing. Graham Potts plans 177 apartments on the former Gowrie Court public housing in Narrabundah. Jure Domazet is waiting for approval for 240 apartments and townhouses on Limestone Avenue near the War Memorial.
But questions remain about the capacity of the market to absorb so many new apartments.
The latest building approvals data shows the number of new free-standing houses approved is down less dramatically, with 753 approved so far this year, compared with 871 for the same period last year.
Overall, the trend in dwellings - houses, townhouses and apartments put together - is at a 10-year low. Just 193 dwellings were approved in August (in trend terms), down from a high of 768 in June 2018 (trend figures).
Housing Industry Association ACT head Greg Weller said the apartment downturn had been expected for some time and could reflect a structural downturn, with apartment numbers settling eventually at a lower level. But given the volatility in the apartment market, the picture was not clear.
"It's been a discussion point for some time as to whether we have too many apartments, but in terms of rental returns and in terms of the availability of rental stock, we're not seeing a glut in the market of apartments that can't be rented," he said.
"So for the time being it certainly seems to be the case that the apartments that are being built are being taken up."
Mr Weller was more concerned about the fall in approvals for detached housing, when an increase had been expected. He blamed the government's slow approval of development applications, with most not being processed in the legal time frame.
"People have had approvals that have been in for a period of time, and the customers have turned around and said, no we're putting the land back on the market and we're going to buy an existing home," he said.
"We were hoping to see a lot more approvals coming through than we have. There is a lot more land available in the market than a couple of years ago. We have very good fundamentals in the ACT ... so we probably should be building a few more homes than what we are."
House prices continue to buck national trends, although apartment prices are moribund.
CoreLogic data out on Tuesday showed the value of houses continues to grow in Canberra, up 1 per cent since August and 1.9 per cent in the past three months. Sydney and Melbourne house prices have bounced back in the past three months, up 3.6 and 3.4 per cent, signalling the recovery in those cities is in full swing, according to CoreLogic.
Canberra apartment prices are stagnant, although might have turned a corner according to the CoreLogic data, which shows an increase for September of 0.6 per cent in Canberra (1.1 and 1.4 per cent in Sydney and Melbourne). So far this year, Canberra apartment prices are down 1.5 per cent.