Building approvals fall
House approvals picked up a little further in April, thanks to another strong showing in Perth.
Home approvals in Melbourne, on the other hand, appear to have lost some momentum.
Volatile unit approvals fell -19 per cent in April, but looking beyond the monthly noise there are some grounds for optimism that construction activity will be strong in the space over the next few years.
Total approvals for the month of 14,633 seasonally adjusted were the lowest monthly total since August 2024.
Thus, the recent trend in approvals for units and attached dwellings has been quite weak, but, that said, surely we are beyond the cycle lows now.
The annual number of dwelling approvals was the highest in two years at 182,000.
The wrap
Overall, it looks like we are beyond the nadir for the housing construction cycle and things will begin to pick up strongly from here.
That said, there is a huge shortfall of housing to be addressed, and 14,600 approvals in a month isn't going to cut it (we'd need to be running at minimum 20,000 per month).
The government's target of 1.2 million homes over 5 years looks like a distant dream, with approvals tracking at only 77 per cent of the implied 20,000 per month level since 1 July 2024.
Sydney in particular seems to be tracking a long way behind the required housing supply at this stage in the cycle.
In other news CapEx figures and especially the retail trade figures were surprisingly weak - retail turnover declined in April - pointing to an ongoing sluggishness in consumer confidence.
Cameron Kusher went through the key building approvals figures in more detail
here - after so many years in the real estate economics industry Cam is going out on his own at the moment with Kusher Consulting, so give him a follow.
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