Australia’s residential dwelling approvals fell 15.3% over the year ended April 2019, totalling 194,643 separate dwellings. The fall is large and consistent with earlier months, but it does not tell the full story, as data newly analysed by FWPA demonstrates.
The first chart really just sets the scene. It shows Australia‘s residential dwelling approvals on a monthly and an annualized basis.
To go straight to the dashboard and take a closer look at the data, click here.
We might anticipate that we all know this chart well, but the important point to note could be that the total decline in housing approvals (the green line) is far steeper than the decline in approvals for houses (the red line).
What we may be less familiar with, is the quarterly data that could overlay the approvals, showing the value of work done on houses. So, the chart below shows the value of work done on both a monthly basis and an annualized basis, and only on houses.
To go straight to the dashboard and take a closer look at the data, click here.
Much like approvals of houses, the solid monthly columns are pretty stable, all things considered, and taking scale into account, the value of building work done on an annual basis is also relatively stable, coming in at AUD36.5 billion over the year-ended March 2019. We can see that the peak was reach in the December Quarter of 2018, and looking back to the first chart, we might surmise that most of that was linked to the peak period of approvals from about six months earlier.
The sibling to the ‘House’ chart is the chart showing multi-residential dwellings, set out below. This addresses the value of building work of everything other than houses.
To go straight to the dashboard and take a closer look at the data, click here.
What we think is remarkable, or at least comment worthy, is that the combination of different multi-residential dwellings has resulted in quite stable total value of building works since late 2016.
At AUD32.1 billion, the value of building work done on multi-residential dwellings over the year-ended March 2019 was a little short of 47% of the total value of building work. That is interesting because that is pretty close to the proportion of total approvals for multi-residential dwellings also.
Why does this matter for the Australian housing economy? It is a big sector and money spent is the driver for the sector’s continued well-being – and its recovery from the soft year that has passed. That applies as much to the forestry and wood products sector of course.
But the really important point is that if the lag from approvals to the value of building work being booked is accurate, then the value of building work in coming months could fall further than was already recorded for the March quarter.
There is no certainty in this, but this newly available dataset provides some more food for thought.
