Today, our chart shows the number of dwellings approved, but not yet started.
It is one of those property charts where, if the lines go down, it is a good thing.
At present, some 38,000 detached houses have been approved but haven’t yet commenced construction.
This is about a third of last year’s house approvals.
But it is the attached dwelling figures that are alarming, with about 115,000 apartments/townhouses approved, but still waiting in the wings.
This is almost 100% of last year’s attached dwelling approvals!
Taking a longer view, these 115,000 represent 50% of the last two years’ approvals, or 36% of the last three years.
When breaking it down, the supply of approved but unbuilt dwellings is spread out as follows:
Our reading is that new housing construction has passed its peak for this cycle.
In some locations, we are now building too many new homes.
Whilst in others, not enough new stock is being delivered.
Whilst there is a mismatch between the type of new dwellings being delivered and what the local market really wants, the next phase of the new housing building cycle will be much more difficult to supply and sell.
Financiers, developers and builders need to do more work to ensure that the projects in which they are interested, will remain viable.