Construction is slowing down in Australia

Construction is slowing down in Australia

The Reserve Bank has issued a rare double warning which feels as though it could only happen in Australia. A slowdown in construction is hurting the market badly, the central bank says. Yet, ironically, another cost boom could be set to explode.

The first and most urgent warning is about building slowdown. It’s more extreme than the Reserve Bank (RBA) anticipated, the deputy governor admitted on Thursday.

Many, many families in this country depend on somebody who works in construction or a related business.

The housing recession is already biting. We’re building less already. Investment in new high-income and high home has dropped as well as alterations and additions (renovations).

But there’s still a ways to fall for higher-density jobs if they’re likely to come back to their old levels. And if you look at building approvals, they indicate high-density building will fall hard as it drops.

Building approvals are like a crystal ball for the building market. They let us see the future as you’ve got to have a project approved before you build it. And what we see in the crystal ball is a distinct lack of activity.

For how long can we have these two lines on the chart moving apart from one another? And if they do finally return together, which one goes? Does the market catch up or do home prices go back?

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