Dwelling commencements climb, builders optimistic

New data from the Australian Bureau of Statistics (ABS) has shown during the June quarter, work commenced on 64,596 dwellings, was 23.2 per cent more than the prior quarter and 52.8 per cent more year-on-year.

Construction began on 40,820 houses (58.9 per cent more year-on-year), as well as 22,515 dwellings other than houses, such as units, apartments or town houses – which was up by 45.1 per cent year-on-year.

The figures also confirmed there had been 139,915 detached house commencements in the 2020/21 financial year.

Notably, the dwellings other than houses had a substantial increase from the prior quarter, up by 47.5 per cent, while houses had climbed by 13.7 per cent.

The total value of residential building work slipped in the June quarter from the previous three months, down by 0.1 per cent to $18.6 billion worth.

However, residential construction was considerably higher year-on-year, with the value of new residential buildings up by 4.7 per cent, while alterations and additions had jumped by 21.5 per cent.

Michael Sukkar, Minister for Housing and Assistant Treasurer noted the ABS data showed the value and number of dwellings had been higher than any previous quarter on record.

He put down the rise to the government’s HomeBuilder program.

“With more detached house commencements in the June quarter than any other year and nearly 140,000 commencements in the last financial year, the HomeBuilder impact continues to support tradies jobs and help Australians into home ownership,” Mr Sukkar said.

“At a time of great economic uncertainty, Home Builder gave people the security and the confidence to build or rebuild a home. These figures show that the program is still driving economic activity and the building and construction industry.”

The total value of work done across Australia during the June quarter, at $30.3 billion worth, had slipped from the prior quarter by 0.2 per cent, but it was 2 per cent higher year-on-year.

Non-residential building on the other hand, at $11.6 billion worth, had slipped by 5.1 per cent year-on-year, although it was somewhat flat from the prior quarter (up 0.9 per cent).

Meanwhile, the Housing Industry Association also published its own New Home Sales report, based on a survey of large volume home builders in the five largest states – which recorded a 2.3 per rise in sales of new detached houses in September, compared to the previous month.

According to the association’s economist Tom Devitt, sales have “remained resilient” since the end of HomeBuilder in March.

“In the six months from April to September, new home sales were 9.3 per cent above the same period in 2019 and 0.8 per cent above the same period in 2018,” Mr Devitt said.

“On a quarterly basis too, the last three months were up by 7.4 per cent and 0.6 per cent on the same quarters in 2019 and 2018, respectively. These are the best years for comparison, rather than 2020, as they predate [both] the pandemic and the HomeBuilder stimulus.”

Across the states, Western Australia led the pack, up by 46.3 per cent compared to the same period in 2019, followed by NSW (up by 34.6 per cent), Queensland (slipping by 0.8 per cent), Victoria (down by 6.1 per cent) and South Australia (down by 13.4 per cent).

Mr Devitt added the strong sales will ensure the boost in home building flows through to the second half of next year.

“When combined with the ongoing strength in renovation activity the home building sector will continue to pull the economy forward for at least the next year,” he said.

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