End of the boom
New attached dwelling commencements fell 8.4 per cent in the September 2018 quarter, and house commencements were down 4.2 per cent.
The smoother trend figures showed that commencements were still fairly high in the third quarter, but it's also likely that these figures have deteriorated a good deal in the months that have followed.
The smoother trend figures showed that commencements were still fairly high in the third quarter, but it's also likely that these figures have deteriorated a good deal in the months that have followed.
Developers had made significant inroads into the pipeline by the end of September 2018.
The number of completions hitting the housing market was very high at the end of September, as evidenced in rising rental vacancies by the end of the calendar year.
The data lags significantly, but at the end of September there were still some 225,000 dwellings under construction, including 157,000 attached dwellings, meaning that access to mortgage finance in 2019 will be critical (although even then conservative valuations could lead to a crash of settlement defaults).
At the state level, New South Wales (66,000) and Victoria (50,000) still had a particularly high number of attached dwellings under construction.
Mortgage lending has been tightened considerably in recent years to prepare Australia for such a time when "an unseasonal cold snap" one day arrives.
Unfortunately, the unseasonal cold snap has now arrived - in no small part because of the weakened housing market - with Westpac reporting consumer confidence "evaporating" in December, the reading crunched 4.7 per cent lower to 99.6, representing negative territory for that survey.
Trying to be optimistic, there is still enough activity live and in the pipeline for the economy to come through this soggy patch relatively unscathed, but in my opinion that won't happen if established dwelling prices continue falling in Sydney and Melbourne.
Trying to be optimistic, there is still enough activity live and in the pipeline for the economy to come through this soggy patch relatively unscathed, but in my opinion that won't happen if established dwelling prices continue falling in Sydney and Melbourne.
