The number of new homes commencing construction in the June quarter increased by 1.1%, the first increase since December 2017 according to Tim Reardon, HIA Chief Economist after the ABS released building activity data for the June quarter of 2019. Source: Timberbiz
Despite a small improvement in new home starts in the June quarter, they remain 20% lower than against the same period a year ago.
“The increase in total starts was due to a 21% lift in multi-unit starts, mainly in NSW and WA. Detached housing starts have slowed to their lowest level since December 2013,” Mr Reardon said.
“More recent data informs us that the downturn in detached home starts has slowed. The impact of three cuts to interest rates and small fiscal stimulus has slowed the decline in work entering the pipeline.
“The slowdown in building activity over the past 18 months has adversely affected the national economy and has been one of the main drags on GDP growth.
“A return to normal lending conditions would provide a boost to home building and the wider economy.
“Indications are that the downturn in new projects entering the pipeline are starting to improve following cuts to interest rate but the market is not yet at the bottom of this cycle.
Annual housing starts during the 2018/19 financial year fell in all states and territories, with the exception of the Australian Capital Territory (+17.8%) and Tasmania (+5.3%). The largest annual fall was recorded in the Northern Territory (-28.4%), followed by South Australia (-22.6%), Victoria (-17.8%), Western Australia (-14.3%), Queensland (-13.9%), and New South Wales (-13.1%).
