The Australian Bureau of Statistics (ABS) has just released building activity data for the June quarter, the highlight of which is the sharp lift in apartment building across all of Australia’s mainland states.
According to the ABS, the total number of dwellings completed over the quarter rose by a seasonally-adjusted 3,250 units (9.8%), with apartment building rising by 3,321 units (31.4%) and house building falling by -71 units (-0.3%):
The result was a welcome turn around from the March quarter’s results, when dwelling completions fell to decade lows. However, despite the bounce, dwelling construction remains depressed, still tracking below the 28-year average despite Australia’s population growing by around 40% over that time:
The trend in dwelling completions is down across the mainland, with the exception of Victoria and the ACT (not shown below). Housing construction in Queensland, New South Wales and Western Australia, in particular, remains in a funk:
We know from the latest dwelling approvals data that the number of dwelling approvals remains fairly depressed, signalling further weakness in the rate of dwelling construction:
The construction industry will be pinning its hopes on recent interest rates cuts and new home incentives introduced in New South Wales, Queensland and South Australia. If these changes fail to reinvigorate new home sales and construction, the construction industry, which has already shed -9% of its workforce since mid-2010, could be staring down the barrel of further job losses.
Twitter: Leith van Onselen. Leith is the Chief Economist of Macro Investor, Australia’s independent investment newsletter covering trades, stocks, property and yield. Click for a free 21 day trial.
