Hunter and Central Coast see a decline in housing approvals in 2023, but fare better than national average

New figures released by the Australian Bureau of Statistics (ABS) have shown a slight decline in home building activity across the Hunter and Central Coast regions in 2023. According to the Housing Industry Association (HIA), this downturn is less severe compared to the more significant drops observed at both the national and state levels.

Craig Jennion, HIA Hunter Executive Director, noted that “In 2023 total dwelling approvals in the Hunter fell 7.4 per cent, while on the Central Coast total dwelling approvals fell 2.9 per cent compared to the 2022 calendar year.” He compared this to the rest of the country, pointing out that “Nationally total approvals fell 15.4 per cent, while in NSW approvals fell 17.7 per cent.”

The decline translates to a total of 4,786 building approvals in the Hunter and 1,586 on the Central Coast for 2023. This represents a combined decrease of 6.3 per cent from 2022, marking a significant 15.2 per cent drop from 2021 and a 12 per cent decrease from the pre-COVID year of 2018.

Detached homes remained favored in the Hunter, accounting for 55.6 per cent of all approvals. Interestingly, Jennion observed a shift in preferences, with a 17.7 per cent increase in multi-unit approvals in the region. The Central Coast displayed a more evenly distributed preference, with multi-units slightly more popular, making up 50.2 per cent of the approvals.

Jennion highlighted the concentration of residential construction in the regions, stating that “much of the heavy lifting for the residential sector continues to occur in the statistical areas of the Central Coast, Newcastle, Lake Macquarie, Maitland, and Cessnock.” He pointed out that these areas accounted for 89.5 per cent of the total approvals.

Significant growth was seen in Newcastle, with total housing approvals surging by 114 per cent. This increase was bolstered by strong performances in the December Quarter of 2023, particularly in detached dwelling approvals, which rose by 16 per cent, and multi-unit approvals, which skyrocketed by 159 per cent.

The value of approved major renovations and alterations also saw an uptick in 2023. The Hunter region experienced a 10.7 per cent increase, reaching $306.2 million, and the Central Coast saw a 2.9 per cent rise, amounting to $165.2 million.

Looking ahead, Jennion expressed optimism for the residential building sector, citing the pipeline of work approved over the past two years as a basis for continued strong activity. However, he acknowledged the challenges posed by rising interest rates and construction costs, which have dampened consumer confidence in detached dwellings. This is expected to fuel further growth in multi-unit approvals, supported by strong intrastate migration.

Jennion concluded on a positive note, emphasizing the regions’ affordability advantages. “Pleasingly, the relative affordability advantages the region has over other locations will support continued demand for new homes, ensuring the important contribution residential construction provides the local economy continues,” he said.