Australia’s dwelling approvals crash goes from bad to worse

The Australian Bureau of Statistics (ABS) has released dwelling approvals data for the month of August. At the national level, the number of dwelling approvals fell by a seasonally adjusted 1.1% to 12,817. The overall slump in approvals was driven by houses (-2.4%) with units (+3.1%) rebounding.

In the year to August 2019, dwelling approvals crashed by a seasonally-adjusted 21.5%, with house approvals down 17.0% and unit approvals tanking by 28.9%:

A chart showing the time series of seasonally-adjusted dwelling approvals at the national level is provided below, split-out by detached houses and units & apartments:

Dwelling approvals have crashed in trend terms, driven by units & apartments:

Since initially peaking in March 2015, dwelling approvals nationally are down by 37% in trend terms.

Approvals have fallen fast in rolling annual terms:

There were 179,633 approvals in the year to August 2019 – way below the peak of 242,268 approvals in the year to August 2016 – with most of this growth in approvals coming from units and apartments, which are still running well above the 30-year average.

The below chart shows the time-series of approvals at the state level on a trend basis, with massive busts recorded across the major markets:

The dwelling construction bust has gone from bad to worse.

Leith van Onselen

Leith van Onselen is Chief Economist at the MB Fund and MB Super. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.

Comments are hidden for Membership Subscribers only.