Early this month, the Australian Bureau of Statistics (ABS) released housing finance data showing that the number of loans issued for the purchase or construction of new dwellings fell to the lowest level since the Global Financial Crisis in 2008:
On Wednesday, the ABS released building activity data showing that actual dwelling construction across Australia has collapsed.
The number of dwellings commenced fell by 11.8% over the June quarter to be 15.4% lower year-on-year:
The next chart plots annual dwelling commencements, which have fallen to their lowest level since December 2013:
The number of dwellings completed also fell by 7.5% over the June quarter to be down 1.2% year-on-year:
The next chart shows that annual dwelling completions are tracking around their lowest level since 2014:
The pipeline of unfinished homes remains near record highs reflecting widespread insolvencies across the building sector, labour shortages, and high materials and financing (interest rate) costs:
The above data is disastrous for the nation’s rental market, where vacancy rates have collapsed to record low levels of around 1%:
Source: CoreLogic
Basically, the slump in new housing supply has fallen well below population growth via the Albanese Government’s record immigration program:
The below chart shows the mis-match by comparing population growth against dwelling approvals, commencements and completions:
Clearly, Australia’s rental market will tighten further, pushing more tenants into financial stress, share housing, or onto the street.
It is an inequality disaster in the making. And the only genuine solution is to cut the inflow of migrants to a level that is below the nation’s ability to supply housing and infrastructure.
Otherwise, Australia’s housing crisis will continue to worsen.
