Dwelling starts crash
New home starts crashed to a 7-year low in the September quarter, falling 22 per cent from a year earlier to 40,746.
Unit starts continued to fall relentlessly, to be 41 per cent lower year-on-year, driven by declines in Sydney, Melbourne, and south-east Queensland.
There were 48,731 completions in the quarter, well down from 57,514 a year earlier, mainly driven by a 22 per cent decline in detached house completions, although unit completions were also down by 6½ per cent.
Sydney and Melbourne were still churning out the completions in Q3 2019, reflected in a surfeit of rental vacancies in some areas over the Christmas break.
Under construction
By the end of September there were 199,975 new dwellings under construction, down from 227,137 a year earlier.
Looking ahead this figure will likely be closer to 185,000 by the end of this quarter.
The breakdown of attached dwellings under construction by state showed how New South Wales has experienced declining activity since December 2017, from the state's greatest ever construction boom.
Melbourne activity is still holding up roughly in line with rampant population growth, while Brisbane unit construction continues to ease (as it has been since 2016).
Finally, there were about 31,200 dwellings approved but not yet commenced, well down from 46,362 in the December 2017 quarter.
These largely comprised Sydney unit projects, but also there are a number of Canberra apartment projects quietly banking up.
The wrap
Overall this resulted in a double-digit percentage decline in new residential building activity year-on-year.
Infrastructure did pick up some of the slack, with non-residential building up 5 per cent over the past year.
There's also a record level of commercial building in the pipeline, helping to plug the gap.
However, total building activity was well down, and it's hard to see how the economy can be running anywhere close to potential while this remains the case.
For landlords and tenants, tighter rental markets will ultimately lie ahead, but perhaps not until 2021 in many cases given how many apartments are still being churned out.
