Housing supply slump
Much of the recent volatility in building approvals has centred around unit approvals in Sydney.
After a large figure of 4,339 units approved in Greater Sydney in May, only 1,249 were approved in June.
Looking through the noise, unit approvals seem to have found a base, albeit at much lower levels than in the preceding market cycle.
House approvals continue to trend lower, and are -17 per cent lower than a year ago.
If you were being generous, you'd say that approvals have found a base at around 13k to 14k per month, and may trend higher from hear as housing prices continue to rise.
On the other hand, annual building approvals are now approaching decade lows at around 175,000, so supply is likely to fall short of what is needed over the next 5 years.
On the other hand, non-residential building is very strong, boosted by the high value of infrastructure approvals.
In fact, non-residential approvals are at record highs, which will suck some of the capacity away from the residential sector.
Separately figures released by the ABS on housing finance showed lending for new homes and construction sinking to 15-year lows.
The RBA has gone too far, reported the Housing Industry Association:
The Reserve Bank paused interest rates for a second month today, leading commentators to call the peak of the interest rate cycle for Australia.
