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{{propApi.successMessage}} {{region}} Change locationQueensland home building outperforming larger states despite constraints
Queensland home building outperforming larger states despite constraints
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HIA released its Economic and Industry Outlook report recently. The report includes updated forecasts for new home building and renovations activity nationally and for each of the eight states and territories.
“Queensland has seen strong population growth, both from overseas and from New South Wales and Victoria, thanks to its relatively more affordable land and numerous employment opportunities,” added Mr Roberts.
“This has allowed new home building activity to stabilise in Queensland at levels comparable to pre-pandemic, not as deep as the decade lows seen in New South Wales and Victoria. It is also creating significant demands for new housing in the coming years.
“The trick is for policymakers to allow the industry to meet this demand.
“While less constrained than in the larger states, the re-acceleration of land prices in Southeast Queensland illustrates the underlying shortage of shovel ready land and the need for new land to be fast-tracked for residential development.
“In a major global destination like Southeast Queensland, higher density housing development, close to jobs and transport, also needs to do much more heavy lifting, especially with the 2032 Olympics approaching.
“Commencements of multi-units in Queensland were down by almost 60 per cent between 2015 and 2019. More recent labour shortages and blowouts in the cost of materials and finance, have caused a number of already-approved apartment projects to stall.
“Even medium density development in Queensland has been constrained, even more than in other states, by planning rules that limit the number of units that can be built on a given site, reducing site yields by almost 40 per cent.
“These constraints mean activity in the multi-units sector isn’t expected to really gain steam until 2025/26. There is significant upside potential, especially in this sector, if policymakers address the constraints on the industry.
“This means abolishing the punitive taxes imposed on the very investors that are so crucial to building higher density housing. These taxes, which the Queensland government inexplicably elected to increase further in their latest Budget, perversely cost tax revenue in terms of lost construction activity, productivity and economic growth.
“Governments must also ensure sufficient infrastructure to accommodate higher density housing and address local resident and Council objections and obstacles to such development.
“The Australian government must streamline visas for in-demand trades so projects can be completed on time and on budget, otherwise large apartment projects will struggle to even commence.
“As policy currently stands, the kind of home building numbers that would produce markedly more affordable housing in Queensland is not part of our forecasts,” concluded Mr Roberts.
Detached houses: There were 5,160 detached houses that commenced construction in Queensland in the first quarter of 2024, up by 3.5 per cent on the previous quarter. This is forecast to increase by 1.3 per cent to 5,220 in the June Quarter 2024, bringing the financial year total to 19,990, 8.6 per cent down on the previous year. This would mark the trough of the cycle, and the weakest financial year in over a decade. A 10.7 per cent increase to 22,140 is forecast for 2024/25, heading towards a peak of 25,600 in 2026/27, before moderating back to 23,820 in 2027/28.
Multi-units: Queensland commenced construction on 3,190 multi-units in the March Quarter 2024, up by 3.6 per cent on the previous quarter. Another 3.1 per cent increase to 3,290 is forecast for the June Quarter 2024, producing a financial year total of 12,050 in 2023/24, which would be 10.6 per cent down on the previous year and the second weakest financial year in over a decade. A 14.7 per cent increase to 13,830 is forecast for 2024/25, accelerating towards 23,250 by 2027/28 and peaking shortly thereafter.
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