The number of total dwellings commenced across Australia fell by over 16 per cent over the 21 September quarter, according to a new report released by the Australian Bureau of Statistics (ABS).
According to the latest statistics, there were 56,617 total dwelling units commenced during this period alongside 35,521 new private sector houses and 20,041 other residential buildings, also in the private sector.
When compared to this time in the previous year, these totals mark distinctive growth at 30.8 per cent, 31.3 per cent, and 31.1 per cent respectively.
However, they each stand as a more recent decrease when contrasted to the previous 21 June quarter, with all three cohorts reflecting a 16.3 per cent decrease.
For total dwelling units, this fall comes after its 28.7 per cent increase to 67,619 during the previous quarter.
Private sector houses and private sector other residential commencements too reported significant declines since their respective 18.9 per cent (42,445) and 54.1 per cent (23,953) surges in the same period.
But this is also the first time all of these commencements have declined unanimously in two years, with the previous time this freefall occurred being the September 2019 quarter.
Equally, the total value of work being done for both residential and non-residential buildings ($30.6 billion) increased over the year-on-year period at 3.5 per cent but declined quarter-by-quarter at 1.6 per cent.
This is the first drop in growth since the September 2020 quarter.
Both residential ($15.8 billion) and non-residential buildings ($10.3 billion) recorded falls compared to last quarter, falling by 2.6 per cent and 2.3 per cent respectively.
According to the ABS, this decline in residential building commencements is tied to new other residential buildings, which fell by 8.8 per cent to $5.5 billion. Comparatively, new houses grew by 1.2 per cent over the quarter.
Equally, alterations and additions to residential buildings also saw upwards momentum during this quarter, rising by 7.8 per cent to $2.94 billion.
These commencement statistics follow recent ABS data that reports housing approvals increased over the month of November, growing by 3.6 per cent following a fall of 13.6 the previous month.
A report by ANZ, which incorporated the ABS data, also concluded that housing approvals increased by 3.6 per cent over the same period.
However, ANZ senior economist Adelaide Timbrell told Mortgage Business that this uptick may not be for the long-term.
“We’ve already seen that fixed interest rates have come up from their lows, and we still expect the Reserve Bank to potentially end its quantitative easing programme as early as February, which means that fixed interest rates are likely to keep rising,” Ms Timbrell said.
“As the average cost of borrowing rises, the cost of servicing a new build rises, but the average amount of money that a person can borrow for a new home also declines.
“That means that someone who might have been able to borrow a certain amount last year may only be able to borrow a smaller amount this year, that’s something that can reduce the number of people who are going ahead with approval for new builds.”
[Related: Home loans rebounded over November]