Lowest building approvals in a decade
It was another very subdued report for building approvals in March, declining slightly further to a seasonally adjusted 12,686 for the month.
Clearly there's a major issue brewing in the largest capital cities as the Aussie population is set to gap upwards by 1 million plus.
Greater Sydney saw the approvals of just 14,672 houses over the year to March 2023, with the number trending even lower as developers increasingly struggle to make projects work.
There were a couple of brighter spots in the capital cities.
Across Greater Melbourne, where access to land supply is typically a little friendlier, detached house approvals may now have turned upwards.
Looking ahead, about ⅔ of the Build to Rent sector dwelling supply will also go to Melbourne, although this will take time to hit the market.
In Brisbane there's a desperate shortage of housing, with anything decent under $1 million being snapped up in no time with multiple offers...except, that is, for development sites, which are often languishing without much competition.
Unit approvals are at least on the rise again in Brisbane, after bottoming out in October 2022.
Sydney's unit approvals, on the other hand, are now tracking at the lowest level since 2012...and still falling.
Overall, with materials and trades prices having increased over the past few years - and yet another interest rate hike being ratcheted in last week, in May - more builders and developers will likely be facing insolvency over the coming six months.
Total dwelling approvals for the first quarter of 2023 were just 37,600, which was the lowest quarterly total since 2012.
The Daily Telegraph reported that permanent migration into Australia may run as high ass 600,000 over the next financial year due to government policy changes, though even half that amount would still see population growth running at around pre-pandemic highs of about 450,000 per annum.
Since most new arrivals tend to head to Sydney, the pressure on the housing market shortage in the harbour city is set to intensify.
On a brighter note, it's Federal Budget day tomorrow!
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Detailed analysis on the building approvals figures from James Foster you can find here.
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Also due out are the real retail trade figures for the March 2023 quarter.
We can expect to see a significantly negative result for retail volumes, putting a negative GDP print for the first quarter of 2023 firmly into the frame, following on from a drag from net exports.
