Commencements of detached homes fell by 11.1% in the first quarter of 2022, from 33,905 to 30,145. While this is a long way down from the peaks of the HomeBuilder boom, this is still a stronger than pre-COVID levels. Source: Timberbiz
It also sustains total commencements for the last 12 months at 143,037, a record high.
“The slowing in commencements is not due to slowing demand,” HIA Economist Tom Devitt said.
“Home building activity in the first quarter of 2022 was held back by staff shortages associated with the Omicron outbreak and the higher than usual uptake of holiday leave.
“Detached completions also managed to climb by 10.8%, from 28,098 in December 2021 quarter to 31,145 in March 2022. This is the strongest quarter of completions since September 2018 and represents the gradual but continued progress being made in the Home-Builder pipeline.”
Mr Devitt said that despite the rise in completions and decline in commencement of new homes, the volume of detached work under construction was almost 80% above its pre-pandemic levels.
“This was driven by the combination of the HomeBuilder grant and record low interest rates,” he said.
“Even after the end of the grant, all the extra time Australians were spending at home either working or locked down, resulted in a pandemic trend towards space and amenity.”
This had kept demand for new housing and renovations elevated. Other indicators, such as building approvals, finance approvals and new home sales, continued to show a strong volume of work entering the pipeline.
“In addition to this, the multi-units market is also continuing to strengthen,” Mr Devitt said.
“Multi-unit commencements increased by 1.8% in the March 2022 quarter to be 29.7% up in the last 12 months compared to the previous year. This improvement has been seen in both high-rise and medium density units.
“With interest rates and the cost of building increasing rapidly, affordability constraints will increasingly push home buyers back towards more affordable, higher density living and with the return of migration, demand for units should continue to strengthen.
“The combination of all these demand and supply factors – an enormous pipeline of detached and renovations work, rising interest rates, the return of overseas migrants, and ongoing supply constraints – will keep Australian builders busy in 2023,” Mr Devitt said.
