Woeful building approvals slump
The number of attached dwellings delivered so far this year has been desperately low, at about 40 per cent below pre-pandemic levels.
ABS figures released today showed that approvals took another significant leg lower in Sydney in September.
Developers simply can't make many projects feasible at today's prices and are sitting it out until later in the cycle.
Meanwhile, detached house approvals also continue to trend lower in Sydney and Melbourne.
Overall, building approvals pulled back to around a seasonally adjusted 13,000 in September, and just 167,000 over the year.
That's the lowest level in more than a decade, and after accounting for demolitions and obsolete stock, it's not even half of what's needed at the moment, given record high immigration.
Officially there's still a high number of dwellings 'under construction' but in reality many projects have been delayed, mothballed, or cancelled, while many developers have been declared insolvent or on the brink of insolvency.
Tom Devitt of the Housing Industry Association commented:
"Building approvals continue to be weighed down by the fastest increase in interest rates in a generation".
He's not wrong, and it looks like things are set to get worse before they get better in that regard, with the dwelling shortage apparently set to worsen into 2024.
James Foster does the deep-dive on the latest figures here.
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Some further signs that higher interest rates in the Antipodes are doing what they were intended to, with New Zealand's unemployment rate up from cycle lows of 3.2 per cent to 3.9 per cent in the September 2023 quarter.
The underutilisation rate in New Zealand is also up from 8.9 per cent a year ago to 10.4 per cent.
Australia's unemployment rate will be next cab off the rank, according to most leading indicators.
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