Alterations and Additions Soften – Expenditure Down 4.9% YoY

Australian’s love affair with housing does not end with new dwellings. We love to add to our existing houses, with new kitchens and renovated wet areas favourite activities, if evening television is anything to go by. The data for Australia’s expenditure on Alterations & Additions to existing dwellings shows that for the year-ended June, expenditure was 4.9% lower than a year earlier, dipping to a still impressive $8.334 billion.

Feeding into that, the quarterly data shows that the typically strong June Quarter saw expenditure at $2.047 billion, down 4.5% on the June Quarter of 2017, as the chart shows.


To go straight to the dashboard and take a closer look at the data, click here.

Softening of Alterations & Additions expenditure is unsurprising, after a long run of strong growth. As the red line shows, annualised expenditure tracked quickly up to its peak of $8.766 billion for the year-ended June 2017. It didn’t have to end, but it is equally no surprise that expenditure softened. There is after all, only so many new kitchens, improved bathrooms and extra bedrooms that can be added to the nation’s housing stock.

Nowhere is the decline more evident than in the data displaying Loans to Owner-Occupiers for Alterations and Additions. This monthly data shows that in July 2018, loans were valued at $303.0 million, down 2.1% on the prior month. However, as the chart below shows, the value of those loans is almost 16% lower than in July 2017. On an annualised basis, the value of loans was  5.2% lower than for the year-ended July 2017.


To go straight to the dashboard and take a closer look at the data, click here.

Overall, the relatively sharp declines in loans for Alterations & Additions is important because it underscores the emerging softness in the total housing finance market.