Building Activity – Digital Finance Analytics (DFA) Blog

Housing Targets Missed By A Country Mile…

The ABS today released its building activity data for the September quarter 2024. This data provides estimates of the value of building work and number of dwellings commenced, completed and under construction across Australia and its states and territories.

They report that Australia commenced construction on just 43,250 new homes in the first quarter of the 2024/25 financial year seasonally adjusted and completed 44,884 new dwellings in the September quarter.

Remember that the Government has set a target of 1.2 million new homes over five years (July 2024 to June 2029). Based on the current trajectory, which of course has the potential to ramp up in later years at least in theory it looks like around only 173,000 homes will be commenced during the first year of the National Housing Accord period, which is 67,000 short of that necessary to meet the annual targets. And of those new homes completed, this was also well short of well short of the desired 60,000 per quarter.

Yet Albo was out spruiking 25,000 more homes across NSW. Saying And they’ll be connected to the transport, services and local parks that make communities great places to live. Because whether you live in the cities or the regions, everyone deserves the security of a roof over their head. Though Mat Barrie perhaps put his finger on it quite well, tweeting “and probably also connected to electorates who do not vote for the ALP 2PP.

That selfie, one of many from Albo in what I call the announcables category, created a social media storm reaction, including this “Albo posting every single day about how he “fixes” the housing crisis is beyond pathetic. No moral, no spine. Go away…

Actually, the current miss on housing targets is a symptom of a more general malaise. Trouble is neither side of politics wants to fess up ahead of the upcoming election!

http://www.martinnorth.com/

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Digital Finance Analytics (DFA) Blog

Housing Targets Missed By A Country Mile…

00:00 / 00:08:34

Construction Firms Failures Hit A New Peak: There Will Be Consequences…

Last week, yet another building and construction firm hit the wall, collapsing into liquidation owing $5.7m straddling two different states and territories, leading to a “domino effect” impacting 130 projects and 80 staff members.

This is part of the continuing litany of failure, as data from the Australian Securities & Investments Commission (ASIC) shows that a total of 1,245 companies were declared insolvent in May alone.

This is 44% higher than the same period in 2023 and 122% higher than in May 2022. It is also the highest number of insolvencies in a single month since ASIC started reporting this data in 1999. The surge in insolvencies was driven by the construction sector, which recorded 313 insolvencies in May – a record for this cycle.

This is an object lesson for anyone considering contracting with the building and construction firm of any size; do your own due diligence! It also presents another barrier to the Albanese government’s target of building 1.2 million homes in five years—a level of construction that Australia has never achieved before, despite record activity compared with other countries and over 5% of people working in the sector.

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

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Digital Finance Analytics (DFA) Blog

Construction Firms Failures Hit A New Peak: There Will Be Consequences…

00:00 / 00:12:02

Construction Firms Failures Hit A New Peak: There Will Be Consequences…

This is part of the continuing litany of failure, as data from the Australian Securities & Investments Commission (ASIC) shows that a total of 1,245 companies were declared insolvent in May alone.

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

Today’s post is brought to you by Ribbon Property Consultants.

No Homes For You: The Structural Desolation Of Dwelling Approval Falls!

Yesterday the ABS released the latest data on dwellings approved and they fell 0.3 per cent in April, after a 2.7 per cent rise in March, according to the seasonally adjusted data after just 13,078 new homes were signed off for construction.

Looing at the mix, Approvals for private houses fell 1.6 per cent. While approvals for private sector dwellings excluding houses also fell 1.1 per cent in April in seasonally adjusted terms.

In the year to April, just 163,493 new dwelling permits were issued, a level which has been broadly consistent since December as surging home building costs and elevated interest rates batter construction activity. The annual result was vastly outpaced by population growth over the same period, which soared by 626,871 mostly due to surging net migration levels. From July 1, Labor is targeting the construction of 1.2 million well-located homes over five years, requiring a 12 month rolling average of 240,000 new homes.

Aprils figure is well short of the 20,000 homes that need to be constructed each month if the country is to hit the federal government’s target of building 1.2 million new homes in the space of five years, starting in July.

So the chronic housing supply issue will remain a problem and put upward pressure on home prices and rents, leading to higher inflation, and so higher interest rates for longer.

So unless things change, the gap between the supply of dwellings and meeting demand will continue to grow, driving home prices and rents higher, and pushing inflation higher which leads to higher interest rates and mortgage costs.

Step one should be to trim migration meaningfully back to bring the supply and demand back into better balance, remembering that on capita we are still currently building MORE dwellings than other western countries, as I discussed with Tarric Brooker recently. There is a strategic path to tackle the issues we face, but it seems to be politically impossible so more people will struggle to find a place to live – something which should be a basic human right, and a priority for Government.

http://www.martinnorth.com/

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Digital Finance Analytics (DFA) Blog

No Homes For You: The Structural Desolation Of Dwelling Approval Falls!

00:00 / 00:09:58

The Stupidest Tale Of All!

Once upon a time, in a land down under, there was a Government who promised to build 1.2 million homes, over five years, or 240,000 per year or 60,000 homes per quarter. And he huffed and he puffed, but despite everything, the best he could manage, at least in the year to March 2024 was 162,600, homes approved, around 77,000 fewer than the Albanese government’s target and the lowest level since March 2013.

Dwelling construction has collapsed to at least decade-lows at the same time as population growth has surged by a record 660,000.

The only way to solve Australia’s housing shortage is to reduce net overseas migration to historical levels of less than 120,000 per year. Net overseas migration must be lowered below the nation’s ability to build housing and infrastructure.

If we did that, we could move from Albo’s fairy tales, to something more realistic, despite the reality that new construction will continue to grind lower, while existing projects are taking ever longer to complete.

It is truly a fine mess, created by at least 20 years of bad policy, but Albo is chief fairy on top of the tree. Time for mass policy change. Otherwise, population demand will forever exceed supply. And many ordinary Australians will be left out in the cold.

http://www.martinnorth.com/

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The Stupidest Tale Of All!

00:00 / 00:12:26

The Crippling Highrise Disaster Continues…

The truth is that recent high rise construction in many Australian cities, are riddled with defects, and someone needs to pay for rectification. This surge in high-rise apartment construction happened as building certification was privatised, costs cut and poorly trained workers employed.

As a result, we have a litany of increased building flaws and quality concerns, such as cracked foundations, water leaks, balcony defects, and flammable cladding. According to the NSW Building Commission strata survey, more than half of newly registered buildings since 2016 had at least one significant issue that will cost an average of $331,829 to correct.

The Strata Community Association NSW found that waterproofing was the most common major issue, followed by fire safety. It also discovered that around one out of every ten buildings had structural and enclosure difficulties, such as roof or facade flaws.

Examples include Sydney’s Opal and Mascot Towers, which were evacuated due to extensive cracking.

Building regulation consultant Bronwyn Weir cautioned that an “enormous” problem had developed whereby “thousands and thousands of apartments have serious defects in their buildings”. “Some of these buildings could potentially be a write-off. We have what is now you know, a systemic failure that is quite difficult to unravel”, she said.

Engineer Leith Dawes warned that purchasing an off-the-plan apartment in Australia had degraded into a game of “Russian roulette” because of the numerous building faults that are frequently overlooked.

Similar structural problems have been uncovered across Melbourne, including leaking buildings, mould, and faulty balconies, Canberra, Gold Coast and many other areas too.

These problems have cost owners and taxpayers millions of dollars to rectify. But the problems are widespread, and many individual property owners are caught in the crossfire.

http://www.martinnorth.com/

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The Crippling Highrise Disaster Continues…

00:00 / 00:06:10

Government Housing Targets An Impossible Dream As Building Approvals Shrink!

The ABS released data on the total number of dwellings approved in February recently. They say that despite growth in private houses in the month, the total number of dwellings approved fell 1.9 per cent in February (seasonally adjusted), after a 2.5 per cent fall in January. The trend estimate for total dwellings approved fell 3.0%, following a 2.7% January decrease.
Specifically, approvals for private sector dwellings excluding houses fell 24.9 per cent in February in seasonally adjusted terms, driven by a fall in the number of approved large apartment projects. In contrast, approvals for private houses rose 10.7 per cent in February.

This continues to confirm the massive gap between the Government aspiration of 1.2 million new homes over the next 5 years. On a straight-line basis, this translates to a target of 240,000 each year – which by the way is still way under the number needed to house the surging migrants and fill existing shortfalls.

So why not tackle the root cause issue here, too high migration? Entrepreneur Dick Smith fears today’s young people will have no savings and be forced to live in Chinese-style high-rise apartments unless immigration is urgently slashed, according to an article in the Daily Mail.

The veteran businessman and philanthropist says they need to understand the connection between a surging population and climate change. The entrepreneur, who turned 80 last month, fears homes with a backyard in Australia’s capital cities will no longer exist by 2050.

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

Today’s post is brought to you by Ribbon Property Consultants.

Digital Finance Analytics (DFA) Blog

Government Housing Targets An Impossible Dream As Building Approvals Shrink!

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