Housing commencements reach record high

According to a report from the Housing Industry Association (HIA) and Colorbond steel, the last financial year saw the largest 100 residential builders (based on the number of homes commenced each year) start construction on 69,161 dwellings. This is up from the previous record of 69,100 in 2003/04, and the 10-year high of 68,261 reached in 2014/15.

The HOUSING 100 Report 2015/16 notes that as well as being a record year, the year 2015/16 marked the fourth consecutive increase in new dwelling commencements for Australia’s largest volume builders.

The record number comprised 50,507 detached houses, 5,697 semi-detached dwellings, and 12,957 multi-units.

HIA chief economist Harley Dale said that further growth was projected for medium/high density (MHD) dwellings and semi-detached housing, and “reasonably strong” levels of detached house starts were likely to persist.

“A key focus during this record new home building cycle has been on the changing composition of new dwelling supply, particularly the increased volume and share of medium/high density (MHD) dwellings,” he said. “The latest HOUSING 100 results reflect this changing dynamic of Australia’s new home construction landscape.”

The report also revealed the nation’s number one home builder for the 2015/16 period was Metricon Homes, who reported 4,365 starts, of which 3,794 were detached houses and 571 were semi-detached dwellings.

The second highest ranking builder was BGC (Australia), with 4,049 housing starts, followed by Meriton Apartments with 3,793 starts.

While Mr Dale said that the “short-term outlook is healthy”, he also noted that the “record level of MHD product in the pipeline provides the Australian economy with an unprecedented degree of uncertainty regarding the timing and magnitude of the down cycle”.

“Beyond this year, the housing pond becomes muddier,” he concluded. 

“The broad brush approach to credit restrictions applied by APRA, together with the cash-grab transaction costs levied by some state governments on foreign investors, exacerbate the downside risks to new home construction and therefore the broader domestic economy.” 

[Related: Dwelling price growth slows]