Australian housing construction plunges deeper into abyss


Australian dwelling approvals, commencements, and completions have collapsed to a decade low at the same time as the nation’s population growth has skyrocketed:

Dwelling construction vs population change

Loans for new homes and construction are also tracking near historical lows:

Loans for construction

On Wednesday, the Australian Bureau of Statistics (ABS) released data on construction work done, which recorded a 5.2% decline in residential construction over the December quarter of 2023, to be 1.9% lower year-on-year.

The below charts from Justin Fabo at Antipodean Macro plot the change in residential construction across Australia against the ABS national accounts (current to Q3 2023):

New housing construction

Renovation activity has also collapsed through the floor:

Australian renovation activity

Australia’s residential pipeline is slowly falling from its peak, according to Fabo:

Australian residential pipeline

Actual residential construction activity is being constrained by high interest rates, labour shortages, insolvencies, and elevated material costs.

Regardless, the Albanese government’s target to build 1.2 million homes over five years (240,000 homes a year) is in deep trouble.

Australia only built 174,000 homes in the year to September, with net additions after demolitions only increasing by 168,000.


Worse, only 162,000 homes were approved for construction in the 2023 calendar year, 78,000 below Labor’s housing target.

With net overseas migration forecast to remain historically high, Australia is facing a worsening housing shortage and rental crisis.

About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.