This blog has written a lot about the housing construction boom that has gripped Melbourne over the past few years. Few would realise that there’s another “mini-me” boom going on in the Australian Capital Territory (ACT), which has experienced a similar surge in construction.
The ACT’s construction boom is illustrated by the below chart of dwelling completions, which shows a sharp rise in apartment building, in particular:
However, unlike Melbourne, whose construction boom seems to be ongoing, the future of ACT housing construction is less clear, with the recent sharp drop-off in apartment commencements:
Seemingly contradicted by the recent up-tick in dwelling approvals:
In any event, there will be a lot of nervous builders in the ACT, with quarterly employment data from the ABS suggesting construction employment is more more less directly tied to the level of dwelling construction:
With the federal government currently embarking on austerity measures, which are likely to reduce public sector employment and recruitment within the ACT (decreasing demand for new homes), there is the potential that the ACT economy could experience a marked increase in unemployment over the coming year.
Twitter: Leith van Onselen. Leith is the Chief Economist of Macro Investor, Australia’s independent investment newsletter covering trades, stocks, property and yield. Click for a free 21 day trial.
