Apartments drag down building activity

The Australian Bureau of Statistics’ Building Activity data for the September 2020 quarter has revealed that the seasonally adjusted estimate for the total number of dwelling units commenced fell 0.8 per cent.

The decline was driven by the commencements of private sector other residential (units) commencements, which fell by 7.5 per cent from the June 2020 quarter, and by 2.6 per cent from the September 2019 quarter to the September 2020 quarter.

This quarterly decline has followed a fall of 13.2 per cent in the June quarter.

However, new private sector house commencements rose by 4.0 per cent from the June 2020 quarter, and by 7.3 per cent from the September 2019 quarter to the September 2020 quarter.

This has followed a rise of 0.4 per cent in the June quarter.

The value of total building work done has fallen by 2.8 per cent in the September 2020 quarter to $28.8 billion, driven by a 5.5 per cent fall in the value of total non-residential building work done to $11.5 billion, and a 2.1 per cent fall in the value of new residential building work done to $14.8 billion.

The value of work done on new houses fell 0.7 per cent to $8.6 billion, while new other residential building fell 4.0 per cent to $6.3 billion.

However, the value of alterations and additions to residential building work done has risen by 6.4 per cent to $2.4 billion.

The building activity figures have been updated from the preliminary figures released by the ABS in November last year, which had revealed that residential construction work done had declined in the September 2020 quarter to its lowest level since 2014.

Commenting on the figures at the time, Housing Industry Association (HIA) economist Angela Lillicrap had attributed the decline to the impact of restrictions on real estate activity last year due to the coronavirus pandemic, including the Victorian lockdown period.

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