HIA Data – Slower Building Approvals

 

Anticipated Decline in Home Construction Activity Extending Another Year

We are currently poised for a substantial reduction in the construction of detached homes, with the conditions indicating a slowdown in this sector. Even if there were a reduction in the cash rate at this point, it would not be sufficient to prevent a decrease in employment within the housing industry and a subsequent uptick in unemployment levels across the broader economy.

The surge in the cash rate has further compounded the escalating costs associated with land, construction, and regulatory compliance, which, in turn, has put a damper on the demand for new homes. As a result, the backlog of construction projects that have yet to commence has been rapidly depleting during the first half of 2023. The number of newly sold detached homes this year has fallen significantly below levels seen before the pandemic, and there has been an increase in the cancellation of projects that were sold in 2022. This trend is anticipated to translate into a continued deceleration in new construction starts.

You can read the full article here.
Credits: Housing Industry Assoiation (HIA)