Wake up Australia, the Slowdown is Here

As noted here over the past few months there are increasing signs of a slowdown in the Australian economy. Recent data from the from the Housing Institute of Australia on the state of the construction industry confirms that a significant slowdown is underway. From the report:

Key Findings

■ The downturn in the national construction industry deepened in May 2008, due to continued reductions in activity across all sectors.
■ The Australian Industry Group/ Housing Industry Association Performance of Construction Index (Australian PCI®) registered 36.9 in May 2008, to remain below the critical 50.0 points level separating expansion from contraction.
■ Moreover, it marked the third consecutive month of deterioration in overall construction, and the sharpest rate of decline since the survey began in September 2005.

Click on the link above for the full report.

Then we have the Real Estate Institute of Australia's latest report on home prices which showed the biggest decline in national home prices since 2003. From news.com.au.

Record slump in house prices

AUSTRALIA'S housing market took its biggest quarterly dive in five years in the first three months of this year, according to the latest survey figures.

The weighted average median house price dipped 2.7 per cent, slipping from $471,300 in the December 2007 quarter to $458,488 in the March 2008 quarter, according to the Mortgage Choice/REIA Real Estate Market Facts.

The weighted average price for other dwellings including flats, units and townhouses fell by 2.7 per cent in the quarter to $355,297.

Only two capital cities, Sydney and Perth, had a median house price above $450,000, down from four in the December quarter.

Melbourne continued to have the highest median price for other dwellings, while Hobart remained the cheapest capital in which to buy property.

Mortgage Choice and the Real Estate Institute of Australia (REIA) said the fall in the median house price was the biggest in the five years that they have been compiling the data.

click on the link for the full story. Slowly but surely Australia is following the rest of the world into an economic slowdown and it is no surprise that construction and housing are showing the way.