HomeBuilder drives house construction boom

The Australian Bureau of Statistics (ABS) has released dwelling approvals data for the month of September. At the national level, the number of dwelling approvals surged by a seasonally adjusted 15.4% to 15,827. The overall rise in approvals was driven by the volatile units & apartments segment (+23.4%), whereas house approvals rose by 9.7%.

Over the year, dwelling approvals rose by 8.8%, with house approvals surging by 20.7% whereas unit & apartment approvals fell by 12.1%:

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 are now down 27% from their October 2015 peak.

In rolling annual terms, dwelling approvals are down 28% from peak:

The below chart shows the time-series of approvals at the state level on a rolling annual basis. As you can see, VIC has rebounded whereas NSW, QLD and WA have all tanked:

The Morrison Government’s HomeBuilder subsidy is clearly juicing construction, as also evidenced by the boom in construction finance:

This pull forward of demand will obviously leave a bigger supply glut next year. But for now, it’s doing its job.

Unconventional Economist
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