ApartmentsLindsay SaundersWed 08 Jul 26
Housing Commencements Hit Lowest Level for a Decade as Supply Slips
New home commencements have fallen to their lowest level in more than a decade as a decline in detached housing construction adds pressure to Australia’s housing supply pipeline.
Australian Bureau of Statistics data reported 41,600 homes began construction in the December quarter, down 10.3 per cent on the previous quarter and 13.9 per cent lower compared with the same period a year earlier.
The decline was driven by a sharp fall in new private sector house commencements, which dropped 19.7 per cent over the quarter to 22,900 homes and fell 15.8 per cent annually.
New private sector commencements for apartments and townhouses also declined, falling 3.1 per cent over the quarter to 18,700 homes.
The value of residential building work also eased during the period, falling 1.8 per cent to $27.1 billion, while total building work remained relatively steady at $43.9 billion.
The data includes for the period between the start of the year and the end of March, so encompasses two interest rate rises (the third was in May) and the start of the war in the Gulf.
Detached housing remained the weakest part of the construction pipeline, with commencements now sitting well below levels recorded during the recent construction surge.
Private homes commenced, seasonally adjusted
Urban Taskforce chief executive Tom Forrest said the latest figures showed a decline in developer confidence and worsening housing project feasibility.
“The data reflects a sharp downturn in confidence and housing project feasibility,” Forrest said.
“Projects do not commence unless banks, developers and buyers have confidence that they can be delivered and are financially viable. Governments need to focus on reducing the costs that are preventing new homes from being built.”
Forrest said rising construction costs, higher interest rates and government charges were adding further pressure to housing delivery.
“The reality is that we are moving further away from being able to deliver the 1.2 million homes under the National Housing Accord unless governments take action to improve feasibility,” he said.
