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Building starts down

Work commenced on new homes dropped in the final months of 2022 yet building remains high, according to data released this week by the Australian Bureau of Statistics.

The latest figures show that the total number of homes commenced in Australia fell 13.5% to 50,200 dwellings in the December quarter, in seasonally adjusted terms.

Work started on new detached houses fell 10.3% to 32,085 dwellings, following a fall of 15.7% in the September quarter. Multi-unit starts fell 19.4% to 17,070 dwellings, following a fall of 11.6% in the previous quarter.

Most areas saw declines, led by Tasmania (down 34.6%), Victoria (20.9%), New South Wales (13.2%), Queensland (12.2%) and the Northern Territory (6.3%). Increases were seen in South Australia (18.7%), the Australian Capital Territory (17.1%) and Western Australia (12.6%).

Falls in multi-unit starts were also widespread, led by the Northern Territory (down 80%), Western Australia (63%), Tasmania (44.3%), New South Wales (26.3%), Victoria (12.2%), and Queensland (2.6%). The ACT and South Australia reported increased activity, up by 71.4% and 28.6%, respectively.

The value of new residential building work done fell 2.3% to $15.5b in seasonally adjusted terms, following a fall of 2.3% in the September quarter. Work completed on new houses fell 3.7% to $10.0b, while new ‘other’ residential building rose 0.2% to $5.5b.

The housing industry is generally unconcerned about the latest figures, saying that the number of homes under construction continues to grow.

HIA Economist Thomas Devitt commented that this quarter is stronger than any other period in the 20 years before the pandemic.

“The 2021 calendar year saw 147,760 detached house commencements, the strongest calendar year on record, up by 30.5% on the previous year and 11.6% higher than the previous peak in 1988/89”, Devitt said.

“The decline in the number starts in the final quarter of 2021 reflects a slowing from the peak of the HomeBuilder projects in the June 2021 quarter.

“It is not a reflection of a slowing market. Other indicators, such as building approvals, finance approvals and new home sales, continue to show a strong volume of work entering the pipeline”, he concluded.

About Adam Nobel

Principal
M. Bus, Grad Dip Adv, B.Int Bus, LREA

adam@hugoalexander.com.au

0417 007 001

Adam is the founder and Principal of Hugo Alexander Property Group. With a previous career in advertising, 20 years experience in property investment, and 14 years in Brisbane real estate, he knows the market inside out to ensure his clients grow their wealth faster.

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