Changing patterns of residential building approvals

Annual approvals by building type Victoria 2011-2021

In 2021 Victoria saw a record number of residential building approvals with almost 71,000 new homes approved for construction.

An increase in approval of detached houses accounted for much of this increase. About 48,000 of approvals were for detached houses, the most in a calendar year on record. There were about 14,000 approvals for medium-density units and townhouses. Almost 9,000 higher-density apartments were also approved.

This record level of residential development has happened despite a shrinking population.

Over the year 2020-21 Victoria’s population decreased by around 45,000 people. There was an increase of 18,000 across Regional Victorian Local Government Areas (LGAs) and a decrease of 63,000 in Metropolitan Melbourne LGAs.

Much of Melbourne lost population in 2020-21, but there was considerable growth in the outer suburban Growth Areas. Regional Victoria’s growth continued to be concentrated in regional cities and peri-urban areas.

Significant growth in greenfield areas

In Metropolitan Melbourne the increase in residential building approvals was accounted for by a sharp increase in approvals in Metropolitan Melbourne’s main growth areas LGAs[2].

Chart 2: Quarterly metro approvals by ring – Dec 2018-Dec 2021

Approvals in growth area LGAs peaked in mid-2021 and fell back in the second half of the year. There were about 4,700 approvals in growth area LGAs for the December quarter 2019. This increased over the following 18 months to peak in the June quarter 2021 at more than 7,500. It has since fallen closer to pre-pandemic levels with about 5,600 seen in the December quarter 2021. Almost all these approvals were for detached houses.

Most of the increase in approvals in 2021 was largely accounted for by a sharp increase in the number of approvals in the Melton LGA as well as increases in the Casey LGA. Approvals in Melton LGA were well under 1,000 per quarter throughout 2019. They increased through 2020 and then again in 2021 to peak at nearly 2,200 in the June quarter 2021. Casey LGA saw a similar pattern with approvals peaking at over 1,400 in the June quarter 2021.

Chart 3: Quarterly approvals by growth area LGAs – Dec 2018-Dec 2021

Growth in Regional Victoria accelerated

Regional Victoria’s population had been increasing before 2020 but the onset of the pandemic accelerated this. Regional Victoria’s population increased by 18,000 in the year to June 2021.

This increase in population has been accompanied by increases in the demand for housing and residential land.

This was particularly the case in regional cities [3], many of which saw significant increase in residential building approvals through 2020 and 2021. As was the case with Metropolitan Melbourne, with an increase in the number of detached houses, mostly occurring in new greenfield areas.

Greater Geelong saw residential building approvals increase from around 600 to 700 per quarter in 2019 to peak at 1,300 in the June quarter 2021. Approvals in Ballarat increased from less than 300 per quarter in the second half of 2019 to over 600 in the June quarter 2021.

Chart 4: Quarterly approvals, regional cities – Dec 2018-Dec 2021

Other parts of regional Victoria [3] also saw significant increases in the number of residential building approvals for detached houses. Approvals in these parts of regional Victoria doubled from late 2019 to mid-2021.

Chart 5: Quarterly approvals – Regional Victoria less regional cities , Dec qtr 2018 – Dec qtr 2021

What data informed these insights

Monthly residential building approvals data are the key data informing these insights. The Australian Bureau of Statistics (ABS) publishes these data monthly about two months after the reference date.

Download the summary data tables (Excel, 22.6 KB) used to create the graphs above.

[1]  Residential building approvals reported by the Australian Bureau of Statistics. Building Approvals are compiled from building permits issued by local councils. These are not the same as planning approvals.

[2]  Parts of Mitchell are also in Metro Melbourne’s growth areas but are excluded here for simplicity.

[3]  Regional City LGAs: Ballarat (C), Greater Bendigo (C, Greater Geelong (C), Greater Shepparton (C), Horsham (RC), Latrobe (C), Mildura (RC), Wangaratta (RC), Warrnambool (C), Wodonga (C).  Other Regional LGAs: Alpine (S), Ararat (RC), Bass Coast (S), Baw Baw (S), Benalla (RC), Buloke (S), Campaspe (S), Central Goldfields (S), Colac-Otway (S), Corangamite (S), East Gippsland (S), Gannawarra (S), Glenelg (S), Golden Plains (S), Hepburn (S), Hindmarsh (S), Indigo (S), Loddon (S), Macedon Ranges (S), Mansfield (S), Mitchell (S), Moira (S), Moorabool (S), Mount Alexander (S), Moyne (S), Murrindindi (S), Northern Grampians (S), Pyrenees (S), Queenscliffe (B), South Gippsland (S), Southern Grampians (S), Strathbogie (S), Surf Coast (S), Swan Hill (RC), Towong (S), Unincorporated Vic, Wellington (S), West Wimmera (S), Yarriambiack (S)

Page last updated: 24/06/24