Soaring property prices and surging building approvals highlight a residential property market super-charged by record-low interest rates, returning expatriates, and a Fear Of Missing Out (FOMO). CoreLogic has estimated property prices were up 2.2% nationwide in May and up 2.0% in Brisbane. Obviously, such growth rates can’t last forever and one reason is that the supply-side will respond. The April 2021 ABS building approvals estimates published yesterday revealed record levels of approvals for detached houses nationwide (e.g. see charts below showing the surge in detached housing approvals in the major states). Approvals of apartments and townhouses were much higher during the apartment building boom of several years ago, however.
In Queensland, monthly approvals of detached houses are at their highest level (approx. 3,000) since the mid-1990s, but are still less than the peak (approx. 3,500) of that period of high interstate migration (see chart below). That was the time when you’d often hear Premier Goss or Treasurer De Lacy on the TV or radio talking about the 1,000 southerners crossing the border every week, and how that meant Queensland should receive more federal funding.
Finally, the ABS is releasing the March quarter National Accounts this morning. Nationally, growth is expected to have been strongly positive in the March quarter (January to March), with forecasts ranging from 1.5% to 2% (see today’s AFR coverage Surge of confidence as iron ore, retail boost GDP).
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