Going bust
A quick stroll through the latest insolvencies figures from ASIC shows how interest rates are already deeply into contractionary territory, with much more tightening still to come in the post.
Insolvencies in May 2023 jumped to their highest level since 2015, at 868.
Source: ASIC
Voluntary administrations had been artificially low through the pandemic, but they're really taking off in earnest now.
Overwhelmingly this is being driven by the construction sector, with 2,074 instances of business entering external administration over the financial year to date, including some large industry scalps.
Source: ASIC
New unit approvals in the blue chip inner suburbs have crashed to almost zero, according to research by the AFR.
And while the residential construction pipeline theoretically remains large, many apartment projects are being significantly delayed or scrapped outright as businesses fail.
It's a fascinating dynamic: with lending conditions remaining tight there's a pressure cooker situation building in the capital cities as record high immigration meets an inadequate supply of new dwellings.
