Last week, the Australian Bureau of Statistics (ABS) released dwelling approval data for March, which registered a sharp 18.5% one month fall in approvals to be down 36% year-on-year:
According to the ABS, apartment approvals were tracking 60% below their November 2017 peak.
There are 997 words left in this subscriber-only article.
The next chart focuses on the high-rise segment only (i.e. 4 storeys or above) and shows that annual approvals were tracking way below peak across every major capital city market:
Of particular note:
High-rise approvals nationally were tracking 41% below the September 2015 peak;
High-rise approvals in NSW were tracking 58% below the September 2016 peak;
High-rise approvals in VIC were tracking 54% below the October 2015 peak; and
High-rise approvals in QLD were tracking 60% below the October 2015 peak.
According to Domain’s latest rental report, vacancy rate have tightened across all jurisdiction with the national vacancy rate also tracking at a record low:
Even across Melbourne and Sydney, which were hit hardest by the collapse in immigration and suffered from high vacancies in 2020, vacancy rates are now tight (albeit less so than the smaller capitals):
With apartment construction having tanked and the flow of migrants and international students rising (most of whom initially rent apartments in the inner cities of Sydney and Melbourne), vacancy rates are set to plummet.
This represents a sharp turnaround from the beginning of the pandemic in 2020 when immigration collapsed, apartment vacancies soared, and inner city rents collapsed.
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also Chief Economist and co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
Latest posts by Unconventional Economist (see all)
