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{{propApi.successMessage}} {{region}} Change locationCommencements of detached houses continue to decline into 2023
Commencements of detached houses continue to decline into 2023
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The ABS today released its building activity data for the March Quarter 2023. 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.
“This decline in detached housing commencements is part of the ongoing cooling of the market that is expected to continue well into next year,” added Mr Devitt.
“New home sales have declined sharply since the RBA started increasing interest rates last May. This is compounding the high volume of earlier projects that are being cancelled across the nation as home buyers struggle to secure finance in the face of ballooning home building and finance costs.
“This produced the first quarter in almost three years that Australia has completed more houses in a three-month period than it has commenced. Unfortunately, this was driven by the decline in commencements, not a pickup in completions.
“There were only 28,094 detached houses completed in the first quarter of 2023, 9.6 per cent fewer completions than in the same quarter last year.
“Ongoing labour constraints continue to make it very difficult for builders to complete the significant volume of work taken on during the pandemic.
“There remains almost 104,000 houses under construction in the first quarter of 2023. This has been a broadly stable volume over the last 18 months and almost double the 57,500 that were under construction heading into 2020.
“Costs and supply uncertainties are also holding back the multi-units sector.
“Just 19,981 multi-units were commenced in the first quarter of 2023, and 17,266 completed. This is a long way down from the 25-30,000 multi-units that were commenced each quarter during the 2015-2018 apartment boom.
“There are still 136,000 multi-units under construction around Australia. These need to be completed in order to help accommodate the rapid return of overseas migrants, students and tourists that Australia has seen since it re-opened its borders in late 2021.
“Incredibly tight rental markets around the country require concerted efforts to increase the supply of housing,” concluded Mr Devitt.
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