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Residential work done dips to 6-year low

Preliminary ABS data has revealed that the value of residential construction work done has declined in the September quarter to its lowest level since 2014.

According to the Australian Bureau of Statistics’ (ABS) preliminary figures on Construction Work Done, Australia, residential building work done in the September 2020 quarter declined by 1.0 per cent to $17.22 billion, down from $17.39 billion in the June quarter.

This figure is 8.9 per cent lower than at the same time last year of $18.90 billion, and the lowest figure since December 2014, when the value of residential building sat at $16.99 billion.

Commenting on the decline in new housing starts, Housing Industry Association economist Angela Lillicrap pointed out that the data does not include the “positive” impact of the HomeBuilder program due to the lag between buying a house and beginning construction.

However, she said the figures do reflect the impact of the restrictions on real estate activity due to the coronavirus pandemic, including the Victorian lockdown period.


“The value of work done on multi-unit dwellings is down by 19.2 per cent over the year. This poor result reflects the COVID shock compounding a cooling in the market that began at the end of 2018. The outlook for multi-unit starts is expected to remain very poor until the return of overseas migration.”

Ms Lillicrap pointed out that other housing figures such as HIA’s new home sales data, ABS Building Approvals and Lending Indicators data have all shown that the housing market has accelerated in the second half of 2020, which she said would flow through to work on the ground in the December quarter.

“The announcement of HomeBuilder was the catalyst for a surge in demand for new detached homes, but there are numerous other factors at play,” she said.

These include low interest rates and improving confidence in the market.

“With the outlook for a strong new home building market and a strong renovations market, employment within the sector will grow into the new year.”

Overall, total construction work done fell 2.6 per cent to $51.18 billion (seasonally adjusted estimate) in the September quarter.

Total construction work done fell in all states and territories, except the Northern Territory, which rose 3.9 per cent during the quarter.

The ACT posted an 8.7 per cent decline, while construction work done fell by 5.1 per cent in Victoria, 4.8 per cent in Tasmania, 2.2 per cent in Queensland, 1.7 per cent in NSW, 1.6 per cent in Western Australia and 0.6 per cent in South Australia.

Building work done fell 2.0 per cent to $28.98 billion, according to ABS figures.

[Related: Building activity continues to shrink]

Residential work done dips to 6-year low
Residential work done dips to six-year low

Malavika Santhebennur

Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.

Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.

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