Jeremy Grantham famously declared that a housing bubble is not a housing bubble until it sees a fully-fledged supply side response. To date, Australia has avoided that fate through a combination of choked approvals processes, financial concentration and good luck.
But no longer, Australia is now in the midst a truly gigantic supply side construction boom. It has already overshot MB’s original forecast for a peak this year and now looks like it will enjoy an extended plateau peak for much of next year as well (not adding much to growth but not taking it away, either). This comes despite tightening credit and easing population growth thanks to international builders and external finance. Sydney and Melbourne especially just keep on building:
It’s great news in the short term as it supports growth. It’s even better news longer term as rents falls, from the RBA:
