The RBA has raised interest rates again; the banks are passing on the rate hike to customers; construction activity is falling and so are new dwelling approvals for private sector houses? so what is really going on with Australia?s property market?
In May, Australia?s owner-occupier new loan commitment value fell 9.7% from the same time a year earlier, while new loan commitments for construction of dwellings fell by 26.7% from May 2021.
Australians are have seemingly turned their backs on new builds as the RBA continues to aggressively raise the nation?s cash rate.
Despite underemployment in Australia?s construction industry actually declining since 2021, showing a glimpse of hope that the labour shortage may be over, supply chain constraints and product shortages continue to increase the price of building.
On top of this, the number of builders calling in the liquidators continues to grow amid soaring construction costs.
So what can we expect to happen to the industry if the storm keeps brewing? Expect an outlook of more liquidations and less builds to come.