Wednesday’s dwelling construction data from the Australian Bureau of Statistics (ABS) was an unmitigated disaster and showed that the nation’s housing shortage continues to worsen.
Only 171,667 dwellings were completed in the year to March, roughly 78,000 below the Albanese government’s annual 240,000 construction target.
The forward-looking construction indicators were even worse.
There were only 163,759 homes approved for construction in the year to May 2024, which is roughly 76,000 below the Albanese government’s 240,000 annual construction target.
Only 158,933 dwellings were commenced in the year to March, roughly 81,000 below Labor’s annual target.
At the same time, the latest monthly permanent and long-term arrivals data from the ABS showed that net overseas migration remains hot, with Australia receiving 242,750 net arrivals over the first five months of 2024, which was 34,660 more than at the same time in 2023 and 91,300 more than in 2019:
The first chart shown above also shows a massive disconnect between the number of dwelling completions and approvals/commencements.
As you can see, dwelling approvals/commencements boomed during the pandemic; however, completions never caught up.
The following charts from Justin Fabo at Antipodean Macro show that Australia has a large pipeline of homes either under construction or awaiting construction:
There are also a huge number of unfinished apartments across Australia:
The above charts show why simply relaxing planning won’t magically lead to more supply.
Australia is sitting on a massive stockpile of homes approved for construction.
But because of high materials and financing costs, as well as labour shortages, these approved homes are not moving to completion.
