Building approvals backflip

Well, so much for the good news. The August pump in Building Approvals has more than reversed, returning the series to its declining trend in September:


The state by state table shows universal (-SA) falls:

NSW more than reversed its jump. The Victoria boom continues its unwind as well. Here’s the chart:

Once again the RBA looks good.

David Llewellyn-Smith
Latest posts by David Llewellyn-Smith (see all)


  1. No point building what people can’t afford to buy. And with Alan Joyce setting the cat amongst the industrial relation’s pigeons, perhaps more rate cuts is the closest thing to a near term boost to disposable income.

    • Jumping jack flash

      Except, of course, you have to pay debt back at some point, so it doesn’t really come close to being a substitute for increased earnings and disposable incomes.

      I really think the banks and RBA have somehow forgotten this.

      Debt = productivity as far as they can see. And it does. To a bank. Westpac posts another record profit.

      Let banks run the show long enough and everything gets tipped on its head because their models are upside down to how things should really work.

      • The turning point in our housing market will come the day people realise just how much money they are committing to pay back when they sign up for a mortgage. Up until now, many people ignore that because “house prices always go up” so they are guaranteed to sell their house for more than they paid for it.

        I wonder if the new regulations that force the banks to provide a simple “total cost of mortgage” summary to borrowers will bring forward that day.

        • Very true. In the good times, we only care about the interest on our loans. When the market turns down, we worry about the principal.

          • Actually Sherlock, from the large body of reserach we did when my business was as a lender, people only care about the monthly payment. Interest rate is just a number

          • It’s not easy to find a summary but here’s a link to the legislation.

            2.10 A Key Facts Sheet for standard home loans is a document which contains the information and complies with the requirements prescribed by the regulations. It is proposed that the form of the Key Facts Sheet will be prescribed by regulations. [Schedule 1, item 5, section 133AB]

            2.11 This document will summarise the key facts about a given home loan, which may include:

            • the interest rate;
            • the all‑in rate, that is, the total cost including interest plus fees;
            • the total cost of the home loan;
            • particular product features;
            • fees; and
            • an explanation of how monthly repayments will be affected if interest rates increase.

  2. A long drawn out “super housing bust” is upon us.
    I wonder if people who bought McMansions at 400,000+ feel stupid yet?
    (At least people have stopped talking about property, property, property at parties!)

    • I still talk about property at parties* but it’s more like:
      “Property down, property down, property down. Don’t Buy Now”

      * who am I kidding? With two young kids I don’t go to parties anymore.

    • 400,000+ try 500,000+
      and I doubt it, it seems 95% of the population still can’t see the dizzying heights prices have climbed.

      • “Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one.”

        the lemmings are waking up, when you talk about the decline in prices many now become aggressive/defensive/in denial etc. the tone has changed. cognitive dissonance is still in play though.

        • all it took me was a look at property prices in the US and what you can get there in some nice cities… dont think i want that inner Sydney one bedder for 500k thanks..

          • I know exactly what you mean, I seen a 2 bedroom multi story house for sale on the outskirts of Chicago city centre for only $54,000 and this house was no further away that Collingwood or Carlton. It had also been renovated. Chicago is similar to Melbourne.