Last August, I wrote an article, The forgotten boom, about the apartment construction boom taking place in the Australian Capital Territory (ACT).
Yesterday’s dwelling completions data released by the Australian Bureau of Statistics (ABS) suggests that this construction boom might be coming to an end, with overall dwelling completions falling by a seasonally-adjusted -26% in the September quarter on the back of a -47% fall in apartment construction. Overall dwelling completions were also down -33% over the year (see next chart).
The slowdown in ACT dwelling construction is also confirmed by recent approvals data, which shows approvals falling significantly since mid-2011 (see next chart).
The slowdown in dwelling construction has arguably come at an opportune time for the ACT, given that the number of homes for sale remains elevated and the number of rental vacancies has risen significantly recently, according to SQM Research (see below charts).
That said, the drop-off in housing construction in the ACT appears to be having a detrimental impact on employment, with the construction industry shedding -3,800 jobs, or -23% of its workforce, since May 2011 (see next chart).
Suffice to say, there are likely to be a lot of nervous builders in the ACT hoping that the drop-off in housing construction is only temporary.