With the release yesterday of Australia’s dwelling commencements and completions data for the December quarter of 2017, it’s an opportunity time to once again examine how Australia’s dwelling supply is tracking against population growth.
The below charts track the following, which are based on the latest available quarterly data:
- Dwelling approvals to December 2017;
- Dwelling commencements to December 2017;
- Dwelling completions to December 2017;
- Population change to September 2017; and
- Net dwelling additions to September 2017.
The national picture shows that dwelling approvals rebounded somewhat after falling sharply from recent all-time highs, although commencements continued to fall. After surging recently, completions also fell in the December quarter. Population growth had also accelerated to 396,000 people in the year to September 2017:
Overall, the dwelling construction boom looks done. While the construction pipeline remains large, dwelling completions should soon play catch-up with commencements before peaking. The recent sharp acceleration in population growth (immigration) has also mitigated the potential oversupply risks that were apparent this time last year (i.e. before the 2016 revised up population growth).
Meanwhile, separate data on net dwelling additions – which is arguably the best data to use when assessing actual dwelling supply, since it takes into account demolitions as well as new additions – shows that actual dwelling supply has fallen just as population growth is increasing:
There’s a much more detailed report, which breaks-down the data by state, available to subscribers. This data shows a bifurcated situation, whereby housing shortages are developing in Sydney and Melbourne, whereas surpluses are developing elsewhere.
