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Non-Residential Building Approvals: Markers of Infrastructure Growth

The non-residential building sector plays a vital role in shaping Australia’s economic landscape, reflecting the government’s commitment to investing in infrastructure and amenities. As such, understanding the trends in non-residential building approvals can provide valuable insights for real estate professionals and property investors, allowing them to make informed decisions and capitalize on emerging opportunities.

In this comprehensive analysis, we delve into a dataset of non-residential building approvals across all Local Government Areas (LGAs) in Australia, highlighting where the most significant government spending is occurring and offering a detailed breakdown of insights at the country, state, and city levels.

Importance of Non-residential Building Approvals

Non-residential building approvals serve as a reliable indicator of government spending on infrastructure and amenities such as schools, roads, transport hubs, industrial and commercial buildings. By analysing these approvals, we can gauge the government’s priorities, the regions receiving the most attention, and the sectors experiencing the highest growth.

The non-residential building sector has a direct impact on the real estate market, influencing property values, rental yields, and investment opportunities. As new infrastructure and amenities are built, property investors can identify areas with potential for growth and capitalize on the increasing demand for real estate in those regions.

Furthermore, real estate professionals can leverage this information to provide better advice to their clients, identify new business opportunities, and stay ahead of market trends.

To provide a comprehensive overview of non-residential building approvals in Australia, this analysis covers more than 400 LGAs across the country. This extensive dataset enables us to identify the most significant trends and patterns, ensuring that our insights are as accurate and relevant as possible.

Recognizing that national trends may not always reflect regional dynamics, our analysis is divided into three levels: country, state, and city. This approach allows us to identify the nuances of each region and provide real estate professionals and property investors with more targeted and actionable insights.

Building Approvals as Indicators of Targeted Infrastructure Expansion

While overall spending in the non-residential building sector may be increasing at the national level, specific states or cities may be experiencing a downturn or surge in demand due to local factors. By examining trends at different levels, we can paint a more detailed and accurate picture of the current state of non-residential building approvals in Australia.

A comprehensive analysis of the total dollar value of non-residential building approvals in Australia yields several significant insights. In this section, we present an overview of the overall findings, including the total value of approvals, a state-wise distribution, and a breakdown of the sectors with the highest spending.

Total value of building approvals by state

Over the past two years, the total value of non-residential building approvals has showcased considerable fluctuations, ranging between AUD 6,300 million and AUD 2,200 million depending on the month. These variations highlight the dynamic nature of the non-residential building sector and underscore the need for real estate professionals and property investors to stay abreast of current trends and market conditions.

When examining the state-wise distribution of building approvals, the following states emerge as the top performers in terms of total value, listed from highest to lowest:

  • Victoria (VIC)
  • New South Wales (NSW)
  • Queensland (QLD)
  • Western Australia (WA)
  • South Australia (SA)
  • Australian Capital Territory (ACT)
  • Tasmania (TAS)
  • Northern Territory (NT)

Our analysis reveals that the highest spending on non-residential building approvals is concentrated in several key sectors. These include:

  • Offices
  • Education buildings
  • Health buildings
  • Retail and wholesale buildings
  • Warehouses
  • Entertainment buildings
  • Short term accommodation

Top LGAs with the Highest Value of Infrastructure Investment

By examining the data at the local level, we can identify the top Local Government Areas with the highest dollar value of non-residential building approvals. These LGAs demonstrate the greatest potential for real estate growth and investment, as they are likely to experience increased demand for property and infrastructure in the coming years.

As we delve deeper into our analysis, several Local Government Areas (LGAs) stand out for their high value of non-residential building approvals for Q1 2023. These include:

  • Penrith (Greater Sydney)
  • Brisbane
  • Sydney City
  • Shoalhaven
  • Georges River
  • Monash
  • Brimbank
Top LGA by infrastructure spending

Interestingly, the whole of Brisbane’s value of building approvals is comparable to just one LGA of Penrith in Greater Sydney. This revelation highlights the considerable disparity in building approvals between different LGAs and the potential for real estate growth opportunities within specific regions.

Similarly, the other highlighted LGAs, such as Sydney, Shoalhaven, Georges River, Monash, and Brimbank, showcase promising investment potential due to their high value of non-residential building approvals. These regions may experience growth in various sectors, such as education, health, retail, and commercial, driving demand for property and offering lucrative opportunities for real estate professionals and property investors.

It is crucial to remember that the data displayed is just a snapshot of the dollar amount spent in a single quarter and that the figures are subject to change in subsequent quarters.

In order to gain a comprehensive understanding of the long-term infrastructure growth trends in different LGAs, it is essential to explore the data across all periods for which it is available, starting from the year 2021 to the present day. By analyzing this broader dataset, we can identify patterns, fluctuations, and trends that can provide valuable insights into the future growth and development of infrastructure in these areas.

State-Level Insights

To gain a better understanding of the dynamics at play in the non-residential building sector, it’s crucial to examine the state-level insights. In this section, we focus on the state-wise distribution and trends of building approvals, emphasizing the performance of New South Wales (NSW) and Queensland (QLD) compared to other states. Additionally, we highlight the impact of the pandemic on health-related building approvals in different states.

Total infrastructure spend by state

Our analysis reveals that VIC, NSW and QLD have consistently exceeded all other states in total dollar value of non-residential building approvals, making them the top performers in this sector. This dominance can be attributed to several factors, including their large populations, thriving economies, and ongoing government investment in infrastructure and amenities.

In the first half of 2022, there was a noticeable spike in health-related building approvals in SA, likely due to the pandemic. This surge in approvals could be attributed to an increased demand for healthcare facilities, such as hospitals, clinics, and testing centres, as a result of the heightened health crisis.

Interestingly, there is no discernible spike in health building approvals in other states. Over the last two years, these states have exhibited a homogeneous trend in health building approval spending, implying a more steady and consistent investment in healthcare infrastructure.

Besides the health sector, it is essential to examine the performance of other major sectors mentioned earlier, such as offices, education buildings, retail and wholesale buildings, warehouses, entertainment buildings, and short-term accommodation. These sectors’ trends at the state level can provide valuable insights into the specific areas and industries driving growth in non-residential building approvals.

Sector-wise Breakdown by State

While the time series graph effectively illustrates the overall trend of building approval spending across each state and territory, gaining a deeper understanding of the data requires examining it in relative terms within each state. By comparing the building approval spending to the total state expenditure, we can better comprehend the significance of non-residential building approvals in shaping each state’s economic landscape and prioritization of infrastructure investments.

Dominant infrastructure spend by state

Every state and territory in Australia exhibits unique trends in non-residential building approval spending, reflecting the diverse priorities and investment focuses across the nation.

In the Australian Capital Territory (ACT) and Tasmania (TAS), education building approvals take centre stage, emphasizing a strong government commitment to enhancing the quality of learning facilities and providing better opportunities for future generations.

Meanwhile, New South Wales (NSW) has experienced a significant increase in health building approvals, driven by the pressing need for healthcare infrastructure in the aftermath of the pandemic. Addressing vital healthcare needs remains a top priority, it seems.

On the other hand, Western Australia (WA) is witnessing a surge in warehouse approvals, likely due to the expansion of industries and increased demand for storage and logistics facilities. This trend highlights the evolving economic landscape and the potential for growth in the region.

City-Level Insights

Examining non-residential building approvals at the city level provides a more detailed understanding of local market conditions and investment potential. In this section, we offer an overview of five capital cities in Australia and analyze the sector-wise trends.

Total infrastructure spend by city

Sydney, Melbourne, and Brisbane consistently stand out as the top capital cities in terms of the total value of non-residential building approvals. This prominence can be attributed to their large populations, thriving business environments, and the ongoing need for new infrastructure and amenities to support their growth.

Interestingly, all capital cities experienced an aggregate peak in non-residential building approvals during the second quarter of 2022. This synchronicity might indicate a coordinated effort by the respective state governments to stimulate the economy through infrastructure investment or a response to the heightened need for specific amenities and facilities, such as healthcare and education.

Sector-wise Breakdown by City

To glean more valuable insights, a sector-wise breakdown of non-residential building approvals in Sydney, Melbourne, and Brisbane is crucial. By examining the specific areas of investment and growth in each city, real estate professionals and property investors can identify opportunities tailored to the dynamics of each urban environment.

Total infrastructure spend per city

Here is a snapshot of the breakdown of non-residential building approval types in each city, highlighting the sectors with the highest values:

  • Adelaide: The highest values in Adelaide are concentrated in Warehouses, Offices, and Education buildings, suggesting a balanced investment in industrial, commercial, and academic infrastructure.
  • Brisbane: The city demonstrates a strong focus on Office and Warehouse spaces, reflecting the demand for commercial establishments and logistical facilities.
  • Canberra: The Australian Capital Territory’s city leads in Education building approvals, underlining the government’s commitment to fostering a high-quality learning environment in the nation’s capital.
  • Melbourne: The distribution of building approvals in Melbourne appears more uniform, with the highest values spread out across Health, Office, Warehouse, and Education buildings. This diversity indicates a well-rounded investment strategy by the local government.
  • Perth: In Western Australia’s capital, Warehouses account for the highest percentage of building approvals, reflecting the region’s thriving industries and the increasing demand for storage and logistics facilities.
  • Sydney: Health buildings make up the highest percentage of non-residential building approvals in Sydney, emphasizing the focus on healthcare infrastructure in response to the city’s growing needs and the impact of recent health crises.

Being aware of these unique patterns will enable industry players to navigate the ever-changing real estate landscape more effectively and stay ahead of market trends.

Implications for Property Investors: LGA-level Insights

Non-residential building approvals function as a valuable lead indicator for new infrastructure development, providing insight into the direction and priorities of government spending. These approvals have a direct impact on the local property market, as the construction of new infrastructure and amenities can create a ripple effect, stimulating growth and increasing demand for real estate. In this section, we highlight the implications of building approvals for real estate professionals and property investors and discuss the opportunities and challenges that arise from these trends.

As non-residential building approvals pave the way for infrastructure development, they often signal growth opportunities in the local property market. New schools, hospitals, transport hubs, and industrial facilities can attract residents, businesses, and investors to the area, driving up property values and rental demand. Real estate professionals and property investors who closely monitor building approval trends can identify high-growth areas and capitalize on these emerging opportunities.

We have created two insightful Flourish charts to compare LGAs based on infrastructure development. The first chart showcases the total dollar spend on infrastructure projects for each LGA, offering a snapshot of the overall investment in infrastructure development. This data highlights the regions that have attracted significant spending for the development of new facilities, roads, and other essential amenities.

However, to gain a more accurate and meaningful picture of infrastructure development, it is important to consider the population size of each LGA. This brings us to the second chart, which presents a per capita analysis of the dollar spend in each area.

By apportioning the total dollar spend to the number of persons in the LGA, we can better measure the concentration of infrastructure growth and its impact on the overall development and growth of the area.

These distinct visual representations reveal striking differences in the outcomes, highlighting variations in which LGAs emerge as the top performers in terms of infrastructure investment. The per capita analysis allows for a more equitable comparison, as it takes into account the population size and ensures

The observation that various LGAs excel when evaluated using the relative metric implies that a high concentration of non-residential building approvals within a specific region may signal considerable prospects for future economic growth.

This expansion could eventually influence property values within the LGA. Recognizing these contributing elements may prove vital in comprehending the underlying factors for future house price growth in the area.


A thorough analysis of non-residential building approvals in Australia provides valuable insights for real estate professionals and property investors seeking to stay ahead of market trends and identify lucrative opportunities. As our examination of these approvals across various states, cities, and sectors has demonstrated, these indicators serve an important role in understanding patterns of government spending on infrastructure and amenities.

Non-residential building approvals serve as a crucial input into HtAG’s Relative Composite Score, which signals the level of infrastructure investment made by local and state governments. A higher value indicates an area likely to experience further development, as indicated by increased spending on projects such as schools, hospitals, transport hubs, and industrial facilities.

These building approval trends also contribute to the suburb ranking process, where data is transformed from SA2 to suburb level through a data match. By incorporating non-residential building approvals into these rankings, real estate professionals and property investors gain access to valuable information on emerging opportunities and high-growth areas.

As the real estate market continues to evolve, the importance of understanding and capitalizing on non-residential building approvals will only grow. By identifying high-growth areas, monitoring sector-specific trends, and considering the impact of economic and regulatory factors, industry players can navigate the complex landscape and remain competitive in the ever-changing property market.

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