Building approvals snaking around the cycle lows

Building approvals drop again

House approvals slowed modestly in December, mainly driven by Sydney.

And unit approvals dropped by nearly 10 per cent, which essentially comprised 1,000 fewer units approved in Melbourne. 

Some large projects have since been greenlit around Melbourne's CBD in January, however. 

Unit approvals were again surprisingly low across Greater Brisbane, where there's a serious undersupply of housing.

Overall, the trend for building approvals doesn't look clever, heading lower again, as it is.

However, this is possibly around the cycle low point now. 

Certainly let's hope so, because the 162,000 approvals over the past year was the lowest figure since March 2013 (plus don't forget that the Housing Industry Association assesses that 1 in 4 'new' homes is actually a knockdown-rebuild).  

Overall, these were again very weak numbers, and along way behind what's going to be needed.

Zooming out, as Ben Phillips of the ANU points out, this is probably the bottom of the cyclical trend.

Source: Ben Phillips, ANU

By 2027, we'll most probably be looking towards the next apartment supply overhang.  

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Housing prices continued to rise in January, according to CoreLogic's latest index. 

Source: CoreLogic

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