Is Australia in a Housing Recession?
At first glance, there appear to be similarities between Australian and New Zealand residential construction approval numbers in April as both countries suffered a fall in the vicinity of seven to eight per cent after seasonal adjustments.
That, however, is where the similarities end.
In New Zealand, seasonally adjusted residential consent numbers were at their third highest point over the past 18 months and were around one third higher than they were in 2011. April’s numbers were made to look bad only because March was an abnormally strong month.
In Australia, the total number of dwelling units approved for construction (seasonally adjusted) hit its lowest level since January 2009 and was down by almost a quarter year on year.
In New Zealand, the modest housing recovery is being supported by the Christchurch rebuild and a shortage of housing in Auckland – supports which will not disappear soon.
In Australia, aside from last month’s interest rate cuts, housing construction activity does not appear to have many supports at all. Indeed, existing supports – grants for homeowners in Queensland and Victoria – are in the process of being withdrawn.
New Zealand’s numbers are positive and encouraging. Australia’s are ugly....