Building approvals lowest in 11 years

Building approvals continued to crash in April, with unit approvals soft all year in Sydney and Melbourne.

Unit approvals were -35 per cent lower than a year ago, with Sydney and Melbourne leading the plunge.

House approvals are also declining across the board, with only the strong Adelaide market holding the line.

Overall, building approvals fell to the lowest level in the 132 months since April 2012, and are trending sharply lower.

Not much more to add here, except that lending standards are too tight, and with the high costs of construction there isn't much incentive to buy or build a new dwelling at the moment.

Although there is still a very high number of homes 'under construction', many haven't progressed passed the 'slab down' stage, with capacity constraints still impacting the sector.

The construction industry employment surged +12.4 per cent jobs over the year to November 2022, to 1.32 million - remarkably that's almost 10 per cent of all jobs! - though many are employed on major infrastructure and resources projects, and not only in residential construction.

Source: Aus Gov, Labour Market Insights

Materials are also going to remain a problem for the industry.

Population growth is projected to be 4.4 million over the next decade, yet the native timber logging industry is following on from the power stations to being shut down by the Victorian government, so I'm not sure what the plan is to resolve all that (assuming there is one).

Probably importing expensive timber instead, I guess.

About Pete Wargent Pete is a Chartered Accountant, Chartered Secretary and has a Financial Planning Diploma. Using a long term approach to building businesses, investing in equities, & owning a portfolio he achieved financial independence at the age of 33. Visit his blog