On Wednesday, the Australian Bureau of Statistics (ABS) released dwelling construction data for the December quarter, which showed that construction volumes are crashing in the face of soaring material costs and 3.5% of interest rate hikes from the RBA.
Quarterly dwelling commencements collapsed to 41,400 over the December quarter in line with pre-pandemic lows:
Dwelling completions never picked up over the pandemic and remained at 2014 levels at only 42,900 over the December quarter:
The next chart plots dwelling approvals, commencements and completions on an annual basis and shows that completions did not follow historical patters over the pandemic period (highlighted by red circle):
Specifically, rising materials costs, construction delays and home builder collapses have driven a record gap between approvals/commencements and completions.
Accordingly, there are huge numbers of half-built houses across the nation, which is why the pipeline of dwellings under construction remains at historically high levels:
Despite the biggest immigration-driven population boom in this nation’s history, home builders have been hamstrung by soaring input costs and rising interest rates, causing widespread construction delays and pushing many into insolvency.
In turn, Australia’s housing shortage will continue to get worse.
