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{{propApi.successMessage}} {{region}} Change locationMore homes completed than commenced
More homes completed than commenced
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Dwelling commencements fell by 13.5 per cent in the March quarter 2024 compared to the previous year.
- Detached starts fell by 6.6 per cent compared to the previous year.
- Multi-unit starts fell by 23.0 per cent over the same period.
Building activity, Australia
There have been very long lags in this cycle. Higher interest rates continue to depress home building activity, and the number of projects entering the pipeline remains weak. The weakness is not broad-based, however, and there are some jurisdictions that are performing relatively better compared to other states. With New South Wales and Victoria holding a huge share of the national market however, the decline in activity in these two states is dragging on an emphatic recovery in the national figure.
There were 39,720 dwellings that commenced construction in the March quarter 2024, up by 0.5 per cent compared to the previous quarter, but down by 13.5 per cent compared to the March quarter 2023. This leaves overall dwelling commencements in the year to March 2024 to 158,930, down by 11.5 per cent compared to the previous twelve-month period, driven by weakness in detached starts.
There continued to be more completed dwellings than commencements, with 41,330 completions in the March quarter 2024. This has weakened compared to the previous two quarters and is 9.5 per cent weaker than during the December quarter 2023 and 8.1 per cent below the March quarter 2023.
Detached
There were 25,320 detached homes that commenced construction in the March quarter 2024, up by 4.6 per cent compared to the previous quarter but down by 6.6 per cent compared to the March quarter 2023.
This leaves detached starts in the past year to March 2024 to 98,210, down by 14.9 per cent compared to the previous twelve-month period. Since the December quarter 2023, detached commencements over a twelve-month period have tracked below 100,000.
By area
The only jurisdictions that commenced more detached homes in the March quarter 2024 than in the previous year were Western Australia and the Australian Capital Territory. To some extent, detached starts in Queensland and South Australia are only slightly weaker than last year. (down 3.5 per cent and 5.6 per cent, respectively)
Detached commencements in the other jurisdictions remain weak. New South Wales and Victoria have not seen a recovery in detached starts, as is consistent with leading indicators from HIA’s New Home Sales data and the ABS Building Approvals data. The high cost of delivering a completed home to market in these two states’ capital cities, Sydney and Melbourne, are likely constraining a recovery.
- NSW saw a 5.4 per cent quarterly decline in detached starts, to 5,470. This is 15.0 per cent below the number of detached commencements in the March quarter 2023.
- VIC detached commencements increased by 3.9 per cent in the quarter to 8,310. This is 12.2 per cent lower compared to the same quarter in the previous year.
- QLD detached commencements increased by 3.5 per cent in the quarter to 5,160. This is 3.5 per cent lower compared to the same quarter in the previous year.
- SA detached commencements increased by 11.4 per cent in the quarter to 2,360. This is 5.6 per cent lower compared to the same quarter in the previous year.
- WA detached commencements increased by 38.1 per cent in the quarter to 3,820. This is 26.0 per cent higher compared to the same quarter in the previous year.
- TAS detached commencements fell by 10.7 per cent in the quarter to 480. This is 30.4 per cent lower compared to the same quarter in the previous year.
- NT detached commencements fell by 11.8 per cent in the quarter to 80. This is 37.0 per cent lower compared to the same quarter in the previous year.
- ACT detached commencements increased by 9.0 per cent in the quarter to 220. This is 2.8 per cent higher compared to the same quarter in the previous year.
Multi-units
There were 14,250 multi-unit dwellings that commenced construction in the March quarter 2024, down by 5.5 per cent compared to the previous quarter and down by 23.0 per cent compared to the same quarter in the previous year.
This leaves multi-unit starts in the past year to March 2024 to 60,730, down by 5.5 per cent compared to the previous twelve-month period.
By area
- NSW saw a 37.4 per cent quarterly decline in multi-unit starts, to 3,490. This is 44.7 per cent below the number of multi-unit commencements in the March quarter 2023.
- VIC multi-unit commencements increased by 13.6 per cent in the quarter to 5,710. This remains 16.0 per cent lower compared to the same quarter in the previous year.
- QLD saw a 3.6 per cent quarterly increase in multi-unit commencements to 3,190. This remains 17.8 per cent lower compared to the same quarter in the previous year.
Detached house commencements, March quarter 2024
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As we get closer to the 2-3% target, inflation becomes stickier
The data on inflation for the month of July was quite unremarkable and broadly in line with recent assessments of inflation. As we get closer to the 2-3 per cent target, inflation becomes stickier. Another way of putting it is that the rate of getting inflation down becomes slower.
Household goods retailing appears to have strengthened
The value of retail trade turnover in the month of July 2024 was unchanged from the previous month. Over the past three months to July, retail trade was valued at $108.3 billion which is 0.9 per cent higher than in the previous three-month period, to be 2.3 per cent higher than at the same time last year.
The national economy is not representative of the household economy
Real GDP in the June quarter 2024 grew by 0.2 per cent in the quarter and 1.0 per cent in the year. There continues to be an inconsistency between what is happening in the economy in the aggregate and how individual households feel.
Market confidence appears to be returning to the home building market
The rates of growth is impressive but are coming off a very low base, particularly for Hobart, Darwin and Canberra. Detached house approvals over the year to July 2024 actually fell by 19.6 per cent in Canberra, 26.7 per cent in Hobart and 32.0 per cent in Darwin, so they are not out of the woods, at least not yet.
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