Australia’s love affair with high density housing is confirmed in data released by the Australian Bureau of Statistics this morning showing that the 2.8% seasonally adjusted increase in total dwellings approved was driven by a 5.3% surge in “private sector dwellings excluding houses”.
That’s ABS speak for units.
Seasonally adjusted, the total number of dwellings rose to 19,419, including a 1.1% increase in houses, taking total approvals on that front to 9,551. However 9,710 new approvals for units continues a recent phenomenon of apartments outpacing house building.
There is a risk to the developers of these “dwellings excluding houses”, which is already becoming apparent in the recent divergence between the price appreciation houses and units.
No matter how strong the recent surge in house prices has been, the laws of supply and demand can’t be set aside. Today’s data suggests there is a real chance some markets will move to oversupply in the months and years ahead.
The RBA and APRA won’t like this emerging risk.