Homebuilding Approvals on the Rise but Still Below Average
Reading Time: 3 minutesThe Australian housing market is showing signs of life, with homebuilding approvals increasing for the fifth time in six months. This trend provides a glimmer of hope for the nation’s housing supply, which has been struggling to keep up with demand. According to the latest data from the Australian Bureau of Statistics, the number of homebuilding approvals has risen from a recent low of 12,877 in January to 14,797 in July, marking a significant 14.9% increase over this period. A closer look at the data reveals that approvals for houses saw a robust increase of 20.2%, while approvals for other dwellings, including apartments, townhouses, and semi-detached homes, grew by 5.5%. However, while these figures are encouraging, it’s important to sound two notes of caution. First, despite the recent upward trend, homebuilding approvals remain below the 10-year average. This suggests that, although there is improvement, the supply of new housing is still not meeting long-term needs. Second, it’s crucial to remember that approvals don’t automatically translate into completed projects. A certain percentage of owners and developers may decide not to proceed with their construction plans after receiving approval, which means the actual impact on housing supply could be less than these numbers suggest. The housing market is complex, and while the rise in approvals is a positive development, the broader context indicates that challenges remain. As Australia continues to grapple with a housing shortage, the industry will need to find ways to ensure that approved projects move through to completion, helping to address the ongoing supply-demand imbalance.
National Median Property Price Climbs for 19th Straight Month
Reading Time: 3 minutesAustralia’s property market continues its upward trajectory, with the national median property price increasing for the 19th consecutive month in August. However, the rate of growth is beginning to decelerate, raising questions about the sustainability of this trend. According to CoreLogic, the national median price rose by 0.5% in August, but the pace of growth has noticeably slowed. CoreLogic attributes this slowdown to affordability constraints, which have become a significant factor in the market.”Affordability constraints are a key factor behind the broader slowdown,” CoreLogic reported, highlighting the challenges faced by buyers in an environment of rising property prices and high living costs.The delicate balance between supply and demand also plays a critical role in the market’s current dynamics. While there remains more demand for housing than available supply, CoreLogic noted that the flow of advertised supply and demand is becoming increasingly balanced.Despite these headwinds, CoreLogic forecasts that the national median price will continue to rise through the remaining months of 2024, though at a more modest pace. This continued growth is underpinned by a longer-term shortage of new housing supply, a problem that has been exacerbated by ongoing constraints in the residential construction sector.Buyer activity has slowed amid high cost-of-living pressures, but CoreLogic suggests that many vendors still hold the upper hand. In most markets, sellers may choose to delay their property sales if buyers do not meet their price expectations, potentially keeping prices elevated.As the market evolves, both buyers and sellers will need to navigate these challenging conditions carefully. While growth is slowing, the underlying fundamentals of supply and demand continue to support a positive outlook for property prices, albeit at a more restrained pace.