Approvals by local councils to build new homes rose 0.4 per cent in August after falling 1.2 per cent in July and soaring by 11.1 per cent in June. In trend terms, approvals rose for the seventh straight month, up by 1.1 per cent.

The standout performance came from 'missing middle'-style dwellings. In the year to August, over 15 per cent of new homes approved were semi-detached homes, such as townhouses – the highest proportion in 20 years, according to Craig James, chief economist CommSec.

It's "bad news for the doomsayers," says James. "Approvals to build new homes are still rising, in fact at 7-month highs in trend terms," he said. 

"Housing supply is continuing to adjust to rising population growth, and that means more houses and apartments are being built. Activity is easing off record highs, but clearly a flat trajectory is being traversed."

"Demand for semi-detached homes may be providing the construction sector with a second wind," said James. 

"Aussies are wary of the maintenance of a big house but they want a bit of backyard and some independence," he said. "Solution? Semi-detached homes like townhouses and terrace homes."

Over the past year 213,601 new homes have been approved, down 12.0 per cent from the record high 242,625 in the year to August 2016.

House approvals fell by 1.1 per cent in August from 14-month highs, the first decline in five months. Meanwhile ‘lumpy’ apartment approvals rose by 2.3 per cent after falling by 3.3 per cent in July. Apartment approvals have moved in a dramatic zig-zag fashion for the past seven months.

Dwelling approvals across states/territories in August:

• NSW (-9.6 per cent)
• Victoria (-0.5 per cent)
• Queensland (+13.2 per cent)
• South Australia (+3.8 per cent)
• Western Australia (-7.4 per cent)
• Tasmania (+27.3 per cent) 

Trend terms:

• Northern Territory (+8.3 per cent)
• ACT (+8.9 per cent).

HIA's new home sales

In seasonally-adjusted terms, new home sales rose by 9.1 per cent in August after falling a (revised) 15.4 per cent in July. The number of private detached house sales rose by 7.3 per cent while multi-unit dwelling sales rose by 21.6 per cent.

The Housing Industry Association's principal economist, Tim Reardon, said, “Results in July and August have been affected by government interventions in NSW and Victoria which have seen first home-buyers returning to the new home market.

“Victoria has seen record numbers of new building approvals and new home sales are continuing to drive even higher. Strong population growth and employment growth, fortified with enhanced first home buyer incentives, is prolonging the boom in building activity.”

For the three months to August compared with the same period last year, house sales in Victoria are 15.7 per cent higher and up by 9.2 per cent in South Australia. Over the same period, sales declined in Queensland (-7.3 per cent), WA (-15.4 per cent), NSW (-17.4 per cent) and Queensland (-37.9 per cent).

Source: HIA.

Read more about semi-detached housing:

Why we need more compact housing

Medium density approvals outpace standalones for first time

Designing density for blue-chip suburbs