Record house approvals
Building approvals jumped back up to a seasonally adjusted 19,400 in February, following a disrupted January where more Aussies than usual went away on domestic holidays (as also evidenced in the depleted labour force hours worked figures) and approvals were considerably lower.
Let's take a bit of a top-down look at what's going on.
Firstly we can see that house approvals are at record levels at nearly 14,000 in February, seasonally adjusted, fuelled for now, of course, by the government's HomeBuilder stimulus.
The detailed figures show plenty of land release and building on city and town fringes, and it's certainly a good time to be selling dirt.
But, despite a solid rebound in February driven by Melbourne apartments, unit and attached dwelling approvals have plunged to just 5,000 per month, about only half of where they were for a long time previously.
Super funds can't borrow to buy new units, Chinese investors don't like us at the moment, and other non-residents won't pay the surcharge taxes, so unit supply is going to be stymied over the coming years.
Over the year to February around 191,000 dwellings were approved, well down on the 242,000 we saw during the building boom peaks of 2016, but still a decent chunk of building when the international borders are largely closed to immigration.
The thing about detached housing supply is that it responds quickly.
Large unit developments are lumpy and can take 2-3 years to come online, but these days you can get most of a house built in 2-3 months.
Of course, there is natural population growth, and expats are filtering home, so the oversupply risk in detached housing is modest, and will be confined to certain construction hotspots.
Unit approvals in Sydney and Melbourne have continued to trend lower.
But house approvals are firing, especially in Melbourne, and Perth which is absolutely booming on the back of hugely generous government grants.
Major renovation approvals are also ballooning, as Aussies look for worthwhile places to put their stimulus cheques at a time when trips to Bali or Barbados aren't possible.
Overall, a positive set of results for tradies, wages and materials price inflation, and for the economy in general, and nothing too much to worry about from a housing market perspective.
Immigration will restart eventually, but probably not until 2022.
