Insolvencies spike
This housing cycle isn't out of the woods yet - not by a long chalk - as more developers and construction firms continue to go bust.
This is the sort of thing we've been hearing a lot about around the traps, but now there are official statistics to confirm it.
In Q3 construction insolvencies spiked to their highest level since the September 2013 quarter, according to the latest ASIC figures.
There was a sharp quarterly increase in construction insolvencies in Victoria, from 107 to 190, as well as a further increase in New South Wales, and more than a 40 per cent jump in Queensland.
Finance conditions often remains hellishly tight, and developers are increasingly facing challenges related to insurance, while for many apartment pre-sales have dried up.
Construction insolvencies are now at multi-year highs in all three of the most populous states, and have increased sharply to a six-year high at the national level.
You can click on the below image to expand the chart:
There appears to be a general complacency that Australia is 'home and hosed' now that housing prices are rising again, but complacency can so often be a dangerous frame of mind in finance and markets.
It always seemed somehow unlikely that the biggest construction boom in Australia's history would end with a benign whimper, as the multiplier we benefited from on the way up grinds awkwardly into reverse.
If anything the risk of a recession in 2020 appears to be rising, which is why it's been so galling to observe the casual acceptance of labour force slack and years of missing the inflation target.
Someone needs to get this economy moving, or else risk facing the banking crisis that everyone warned about!
