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The ABS today released its building activity data for the September 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 data reveals there were 103,707 detached houses that commenced construction in the twelve months to September 2023, down by 17.0 per cent on the 124,940 commenced in the previous twelve-month period,” added Mr Devitt.
“This points to a slow start to National Cabinet’s ambition to build 1.2 million homes over the next five years starting mid-2024.
“Since the RBA’s first cash rate increase in May 2022, sales of new homes have tumbled. A number of earlier projects are also being cancelled, with banks withdrawing finance in the face of soaring building costs and shrinking homebuyer borrowing power.
“This lack of new work entering the construction pipeline is expected to produce a trough in new house commencements in 2024, when Australia will start construction on just 95,400 new houses, the weakest year in over a decade.
“There was also a decline in the number of multi-unit projects commencing construction, down by 9.6 per cent in the September Quarter 2023 to just 13,916, one of the weakest quarters in over a decade.
“Multi-unit commencements are mounting a recovery on the back of population growth and land constraints, with Australia expected to commence 84,400 new multi-units in 2024.
“This would still put total detached and multi-unit commencements at less than 180,000 in 2024, far below the 240,000 per annum required to meet National Cabinet’s target.
“As fewer new projects begin construction, the pipeline of work that Australia’s home builders have under construction is expected to shrink rapidly this year.
“Meeting National Cabinet’s target will be largely dependent on the delivery of adequate private housing across the housing continuum. This will also have the biggest impact on the cost of housing and rental availability.
“Holding all levels of government to account for improving planning regimes, reducing red tape, and supporting the development of appropriate infrastructure and a skilled construction workforce, must be a priority this year,” concluded Mr Devitt.
The Housing Industry Association ACT and Southern NSW region has released its full 2024 ACT election priorities to address the issues facing housing and residential construction in the capital.
Trade shortages loom as a major threat to the Housing Accord’s target of building 1.2 million homes over the next five years. The target equates to an average of 240,000 homes per annum and Australia has only come close to this level of home building on two occasions in the past. The first was in a single year at the peak of the apartment boom of the mid-2010s (232,000 in 2016), and the second was for a single year at the peak of the COVID era cycle (228,000 in 2021).
This policy reflects HIA’s commitment to fostering a more diverse and inclusive residential building industry. HIA supports efforts to work with government and industry to encourage cultural change and broaden opportunities for all individuals.
The Housing Industry Association is calling on the next ACT Government to address the housing crisis currently confronting the nation’s capital.