The ABS has released its May data for the number and value of dwelling units approved by sector (public/private) and by state, number and value of new other residential dwelling units approved by type of building, and the number and value of non-residential building jobs approved by type of building and value ranges.
TOTAL DWELLING UNITS
The trend estimate for total dwellings approved fell 1.2% in May 2011 and is now showing falls for seven months.
The seasonally adjusted estimate for total dwellings approved fell 7.9% following a fall of 0.3% in the previous month.
PRIVATE SECTOR HOUSES
The trend estimate for private sector houses approved fell 0.7% in May and has fallen for 17 months.
The seasonally adjusted estimate for private sector houses approved rose 0.7% in May following a fall of 2.3% in the previous month.
PRIVATE SECTOR OTHER DWELLING UNITS
The trend estimate for private sector other dwellings approved fell 1.6% in May and is now showing falls for five months.
The seasonally adjusted estimate for private sector other dwellings approved fell 20.1% following a rise of 7.9% last month.
VALUE OF BUILDING APPROVED
The trend estimate for the value of total building approved fell 1.0% in May and is now showing falls for seven months. The trend estimates for the value of building approved should be interpreted with caution. See the data notes on page 2 of this publication.
The seasonally adjusted estimate for the value of total building approved fell 2.8% in May following a fall of 20.7% last month. The seasonally adjusted estimate for the value of total residential building fell 2.7% and the value of non-residential building fell 3.0%.
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Adam still reckons we’re all the mad ones and interest rates should be going up..
His piece includes the surreal quote “The main lesson I’ve learned throughout this whole process is that no amount of evidence will change the opinion of some people.”
My thoughts exactly.
Again, these figures come as no surprise. Actually, some surprise – that they are not more pronounced. The entire property sector is in hangover mode. A small rate rise would ensure it doesn’t reach for that next drink!
One more rate rise would make sure the market doesn’t take off again but the speed and magnitude of falls in Perth, the Gold and Sunny Coasts, Tweed etc has to be worrying.
This makes me think the RBA may already have hit the brakes that bit too hard. I despise the slick talking nest of vipers who have rode the housng gravy train as much as anyone here, but the potential economic damage from even a correcting (10-19% falls) market gives me the shivers.
The RBA should hold IMO.
I suspect they will hold (think Glenn would really like to raise and am coming to that view myself).
They haven’t hit the brakes too hard – they haven’t raised in months but the threat alone has worked well. That and debt saturation.
Time will tell, but if the RBA has hit the brakes too hard it isn’t by much. The current holding pattern mixed with jawboning appears to be holding everything in a delicate balance, for now at least.
Up here in Brisbane the downward momentum appears to be slowing, although it could be more to do with a sudden rush of buyers keen to miss the stamp duty increase. Seriously, I know quite a few people who would actually pay an extra $10K for a property just to avoid giving the QLD government an extra $7K or so in stamp duty.
And I meant to add to that list of worrying markets, Melbourne is a disaster waiting to happen IMO.
I agree, re: rate hold.
IMHO, another rate rise will absolutely rout the non-resources economy in this country…and i think much quicker and heavier than many think.
Dead-set, i have not spoken to one business person in the last month that is upbeat – i’m talking mainly SME…all agree that there is a reckoning coming.
The pollies and MSM, and financial sectors, generally, do not seem to have a clue of the ‘tude on the streets. People are “getting ready”, it seems, and I would suspect that’s part of what the recent savings glut is all about.
My 2c
+ 1
Agree totally. I have two SMEs based in Melbourne and I can tell you everyone I speak with is more than a little concerned. People are not spending and inventory is building up and up. The collective hands have been not been coming out of pockets since Easter. Retail in Melbourne is in a world of pain right now.
The building sector here in the ACT is crying poor that major project work will be coming to an end in the next 12-18 months. Their answer: build more pointless office blocks and underutilised infrastructure so long as the industry can survive on government handouts. Time for a shake out.
http://www.canberratimes.com.au/news/local/news/general/building-sector-runs-out-of-steam/2212886.aspx
Made an unconditional offer of 350 on a place advertised for 400 today. Only been on the market for a month. A place we were keen to view was 450, then 420, then 380 all in 6 months. Just sold 376. I would have paid 350.
Most sellers still have stars in their eyes, and a massive sense of entitlement to boot.
On the train last weekend I overheard two random baby boomers complaining that nobody would pay them what their houses are worth. Both have decided to become landlords instead. That’s OK, the good times will be back in six months time! What could possibly go wrong?
Seller wants 380 according to the agent. I guess he now gets to the other parties interested and tells them he’s sitting on a good offer.
Whatever price is accepted today it will be substantially lower and lower with the passage of time. There is an ever growing number of “for sale” signs and ever diminishing bank of buyers.
The forces of gravity will always prevail!
SMH had an article penned by APM about Sydney auction clearance rates ‘improving’. Their clearance rate was 57%.
Yet not all failed auctions are reported; APM doesnt seem to mention the possibility that less failed auctions are being reported. Certainly i know of one local auction that failed on the weekend that did not feature in the APM statistics.
Anecdotally a lot of the statistics around property appear to be very misleading. The market is certainly weaker than a lot of the stats suggest; in particular median prices can often be quite insensitive to underlying movements.
Ahh, the good Dr Wilson is forever the optimist. Can you blame him for that 🙂
.
Late last year, he was trying to build up the narrative that Melb market was red hot and just months away from overtaking Sydney property market. Now, it looks like he has given up on that endevour and stick to “Sydney wont crash” mantra in his weekly spruikfest.
The number of auctions is absolutely so miniscule as a percentage of houses for sale sitting there for months and months that it is by no means any representation of the state of the market whatsover! Auctions are expensive and you’d only do them if you thought there was a chance of a sale by competition. For every sale by auction there are litterally tens of thousands other houses not selling for many months even after continuous discounting. See http://www.sqmresearch.com.au
Pete – good points.
The most important numbers to watch are the total inventory numbers and trends and the months of supply – bearing in mind 6 months supply is equilibrium.
The rest is pretty much “hot air”.
Tim Lawless of RPData has responded to my queries about the term “valuation dividend” and the case of the missing charts.
Hi Guys
Last week was the biggest number of lending approval for our bank in Qld for the year to date. The data split was leaning more toward purchases than it has for a long time. However anedotely the number of houses on the market in my suburb has exploded. I saw a least ten come on the market in the last week. So mixed messages for sure. I have yet to see the break down of the numbers but the boss was crowing from the roof top about the numbers. I am wondering if these is a rush to beat the stamp duty increase. I think we won’t know who the market is faring until Christmas time.
Thanks Stormboy, I reckon punters trying to beat the stamp duty increase are definitely a factor although the interest rate specials you mentioned earlier must be playing a significant role too.
I know a couple of people who are expediting plans to move so that they can beat the stamp duty increase. Bloody stupid because they’d likely be better off taking their time and just paying the government and extra $7k or so, but people do all sorts of stupid things to avoid paying tax.
Yes I suspect that is stamp duty avoidance in action. So expect a brisk few weeks followed by a post Aug 1 slump.
Had a marketing company call me on the weekend saying the realestate agency they were calling on behalf of were looking for listings in my area. He said they had many clients interested in buying into the area.
Said to him that was great and to send them over and take a look because the place is awash with for sale signs.
There was silence.
Then I said we were renting, and he said oh you’re renting, and then hung up.
A key number to watch is job creation. If this turns negative, then you can kiss goodbye to the housing market. And considering all the anxiety about the place in June – Greece, interest rate fears, tax-talk – it is more than possible that jobs have been shrinking.
We will see.
There I was, thinking I was nothing but a grouch and a pessimist and then I read this:
http://www.eurekareport.com.au/iis/iis.nsf/pages/91F5459B421B8781CA2578C3001FCBD0?OpenDocument
“I joined him (Steve Keen) for the last two or so days of his march, but I must say was never completely sold on the idea of an internally driven correction. In light of RP Data’s figures, I accept that I may have been wrong. I might need to enquire whether I can tag along if Rory Robertson decides to walk to Kosciusko next year.”
LOL!!! Love his honesty.
I’ve been wondering if Rory Robertson has been glancing nervously at his walking shoes lately.
Rory who? :p
Be interesting I will keep you posted on the post July figures.
Well on my recent house purchase, I gave up possibly six months rental income to avoid paying the exorbinant stamp duty difference (it was ca. $10,000 more)
But yes, I’ve heard of several strategies that are implemented purely because of avoiding tax, but has little investment benefit.
One of them is called superannuation.
I am a firm believer that we need to completely overhaul the tax system in this country because of such behaviour. It is a significant inefficiency on the economy to have large numbers of people implementing strategies purely to avoid tax.
And why bother having ‘easy’ deductions that everyone can make? Just lower the freaking tax rates to begin with! not to mention all the little taxes that are still around (some of which should have been abolished when the GST was introduced).
As for super, there is a big danger that future govts will see a multi-trillion investment pool and go for easy tax gains IMO.