Approvals pare back
Building approvals disappointed again in August.
The trend for house approvals was lower for the month, and for the year.
Attached dwelling approvals in Sydney dropped to just 870 - a volatile data series - accounting for most of the monthly decline in approvals.
The trend for Brisbane looks pretty solid, on the other hand.
And, anecdotally, Melbourne zoning changes have helped to deliver some more projects in suburbia in recent times.
Overall, there were just 14,744 approvals in August, another -6 per cent decline to follow a revised -10 per cent decline in July.
Looking at the bigger picture, there were only around 189,000 dwellings approved over the year, at a time when population growth has been thunderously strong.
Since July 2024, there have been approximately 218,000 approvals, about 78 per cent of the implied target of 20,000 per month.
The wrap
It's hard to know where the trend for building approvals goes from here, but the past couple of months have obviously been a disappointment.
The Reserve Bank of Australia delivered a fairly hawkish hold for interest rates this month, with the cash rate target remaining at 3.60 per cent.
Interest rates could fall further as and when the unemployment rate approaches 4½ per cent, but further easing in this cycle is by no means a certainty, as the decline in underlying inflation has slowed.
Given recent inflation and consumer sentiment data, market pricing isn't looking for a further cut until May next year (which ironically may actually slow down the housing supply response a little).
Although there is a fairly sizeable pipeline of dwellings under construction, delivery of new housing supply remains slow and there is a serious prospect of Australia's housing shortage persisting into the next decade given recent trends in population growth.
---
1. Download our property buying guide
Download our free property buying guide here.
You can also check out a few of our recent property purchases here.
Get in contact with us today if strategic property investment is your thing.
2. Subscribe to our Top 10 Podcasts for Investors
Listen in to our podcasts
The Australian Property Podcast is rapidly becoming one of Australia's biggest business podcasts, now with well over 50,000 audio downloads per month, and growing fast.
And our popular Low Rates High Returns Show also remains available on Spotify.
3. Subscribe for my free daily blog
Subscribe for my free daily blog with more than 4 million hits here.
You can also catch up with me daily on Twitter here, where I'm far too active daily and have over 15,300 followers.
By the way, I'm an 8-times published author on finance, investing, and business, so you can check out some of my books here.
My new book, co-authored with Cate Bakos is available to buy here or on Amazon here - check out our free Buy Right podcast series here.
4. Work with me privately
For a limited time you can book in a free diagnosis call with me here, so book in a call today.
