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Home Approvals Falter During A Housing Shortage

AUSTRALIA DATA

The number of dwelling approvals was a lot weaker than expected in December falling 9.5% m/m to be down 24% y/y driven by a 25.3% m/m drop in the multi-dwelling component but private houses also fell 0.5%. Approvals for apartments are at their lowest level since the Covid-impacted June 2020. With the working age population rising 3% y/y, the lack of home building is a problem in a market that is already facing severe shortages and is likely to continue putting pressure on rents.

  • Home building has been impacted by large public infrastructure projects being undertaken in most states, which has absorbed the skilled workforce.
  • Approvals for private homes are down 4.4% y/y, an improvement from November’s -6.7%, there is also positive 3-month momentum. They are still almost 3% below pre-pandemic levels though.
  • The sharp drop in multi-dwelling units in December has resulted in a 44.2% decline on a year ago. The level is almost 40% below pre-Covid levels. The ABS notes 2023 was 19% lower than 2022. But 3-month momentum improved in Q4 2023.
Australia number of dwelling approvals y/y%

Source: MNI - Market News/ABS

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