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Labour shortages continue to slow homebuilding

Media release

Labour shortages continue to slow homebuilding

Media release
“For over two years, Australia’s home builders had been commencing more new projects than they had been completing,” stated HIA Senior Economist, Tom Devitt.

The ABS today released its building activity data for the September Quarter 2022. This data provides estimates of the value of building work and number of dwellings commenced, completed and under construction, across Australia and its states and territories.

“There were only 29,153 detached houses completed in the September Quarter 2022, just 2.5 per cent up on the same time the previous year. The number of homes reaching completion remains no higher than those being commenced with 29,177 new projects started in in the September quarter,” added Mr Devitt.

“Supply constraints were holding back completion of these projects. Materials constraints have plagued builders over the last two years, but the shortage of skilled trades is the number one constraint on Australian builders.

“Over 104,000 houses are still under construction across Australia, almost double the pipeline that existed in mid-2020.
“New house commencements continued to decline in the September quarter with a further 4.9 per cent fall. Commencements peaked in the previous cycle in mid-2021 and are expected to continue to decline into 2024. 

“The volume of houses under construction is expected to keep Australia’s home builders busy this year, despite the slowdown in the number of homes expected to commence construction.

“In addition to this, the volume of multi-unit dwellings under construction continues to grow as commencements exceeded completions over the 18 months to September 2022.

“The multi-units sector should continue to be supported by the return of overseas migrants, students and tourists and the incredibly tight rental markets across the country.

“With interest rates increasing rapidly, affordability constraints will push home buyers back towards more affordable, higher density living. 

“This large volume of work under construction at the end of 2022 will ensure elevated demand for skilled trades across the economy,” concluded Mr Devitt.

Snapshot of building activity pipeline - Houses

Source: HIA

For more information please contact:

Thomas Devitt

HIA Senior Economist

Tim Reardon

HIA Chief Economist
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