The great Australian transition story says that as the mining investment boom recedes, residential housing steps into the breach long enough for the rest of the economy to catch up and domestic growth become more even.
That’s the plan anyway and up until now it has been working.
But the release this morning of construction work done for the third quarter did not go to script, with a fall over the three months to September of 2.2% against expectations of a 1% fall after last quarters 1.2% fall.
Most disappointing was that even though engineering fell 3.2% seasonally adjusted, total building fell 1% and residential was down 1.6% seasonally adjusted as well.
Could housing already be past its peak? Building approvals data suggests so. Key now is how far is the dip? The hope – reiterated by RBA Governor Stevens in the past week – is that there is not a rerun of what occurred in 2009/10.