Quick Bites | Australia is facing a low supply of new houses

We have long drawn attention to the woeful rate of new housing construction, a key factor leading to the surge in housing and rental prices. The value of owner-occupier housing finance approvals increased slightly in November but was a bit below expectations. Compositionally, the number of loan approvals to purchase existing homes continued to rebound (+12.0% year on year) while the number of loan approvals to build new homes remained very soft (-19.1% year on year).

The below 10-year chart shows the dwelling approvals level is still well below average

Source: Trading Economics 

Over 20 years, the chart is even more stark. While the number of mortgage approvals to buy existing homes is rebounding, construction of new homes remains very low:

Source: Goldman Sachs

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