More detached homes commenced construction in the 12 months to September 2021 than in any previous period. Lockdowns in Sydney and Melbourne resulted in a sharp contraction in new detached home starts in the September quarter, with a 16.5% contraction compared to the record high of the previous quarter. Source: Timberbiz
“The decline in new home commencements in the September quarter was not a reflection of a slowing market, with other indicators, such as building approvals, showing a continued strong pipeline,” HIA Economist Tom Devitt said.
“There were almost 36,000 new house commencements in the September quarter. Despite the decline, this is still stronger than any quarter before the mid-2020 introduction of the HomeBuilder grant.
“This puts detached house commencements over the last 12 months at 149,345, a new record high and 12.8% above the pre-HomeBuilder record of 132,377 in 1988/89,” he said.
There were also more than 20,500 new multi-unit commencements in the September quarter. This was down by 15.8% on the previous quarter.
“Despite this September quarter contraction, multi-unit commencements were also still up by 11.7% for the year,” Mr Devitt said.
“The current boom is expected to continue supporting strong levels of employment into 2023, aided further by record low interest rates and the pandemic pushing households towards lower density living.
“Strong employment conditions, rising house prices and consumer confidence are also continuing to support housing demand,” he said.
“The constraint on home building is not demand but the availability of land, labour and materials. The shortage of labour and materials has led to construction timeframes increasing significantly. Under normal circumstances, the surge of HomeBuilder projects would have translated into an increase in completions from the June 2021 quarter. However, completions have been slower to respond. As a result, the volume of approved-but-not-yet-commenced work is at its highest level in over a decade.”
All states and territories saw declines in the September 2021 quarter in new house commencements, led by the Northern Territory (-65.5%), Western Australia (-28.0%), Queensland (-24.6%), Tasmania (-24.2%), the Australian Capital Territory (-11.9%), and New South Wales (-11.3%), Victoria (-11.0%) and South Australia (-8.6%).
A few states saw increases in multi-unit commencements in the quarter, led by Tasmania (+240.4%), Western Australia (+37.2%) and Victoria (+17.0%). The other jurisdictions saw declines, led by the Northern Territory (-46.7 per cent), the Australian Capital Territory (-42.4%), Queensland (-35.2%), South Australia (-33.4%) and New South Wales (-32.6%).
