The current residential building cycle may have peaked in 2016, while the level of detached and multi-unit house-building might gradually decline in the coming years, according to the HIA.
The Housing Industry Association’s latest research found that construction commenced on some 229,000 dwellings during the year ended September 2016.
The HIA said that while this is an “exceptionally high” level of activity based on historical experience, the annualised level of commencements has eased since peaking at over 231,000 in the year that ended in the March 2016 quarter. Of these commencements, 115,953 were detached houses.
From a national perspective, detached house commencements are forecast by the HIA to ease by 1.7 per cent in 2016-17, ahead of a further decline of 7.3 per cent in 2017-18.
However, after falling to a low of 104,800 starts in the 2018-19 year, the HIA said that the level of detached house building is forecast to gradually improve.
Meanwhile, the HIA highlighted that the multi-unit market has also “weakened overall”.
“After a very strong result in the March 2016 quarter, the number of multi-unit commencements fell away quite sharply throughout the middle of the year,” the association said.
In aggregate, a total of 25,202 multi-unit dwellings commenced in the September 2016 quarter, which is equivalent to 113,383 across the full year.
The HIA forecast that multi-unit dwelling commencements will decline during the 2016-17 financial year by 11.3 per cent.
“Looking beyond 2016-17 is when we anticipate commencements will post more significant declines. Multi-unit commencements are forecast to decline by around 25 per cent in 2017-18, and then by a further 12 per cent in 2018-19,” it said.
“The 2018-19 year is projected to be the low point of the cycle for multi-unit commencements, when 68,400 starts are forecast to occur.”
[Related: Housing commencements reach record high]