Construction on new homes had already started to slow before Covid-19 took hold of the economy, according to the latest Australian Bureau of Statistics figures.
New residential home building fell to a six-year low of 173,707 projects in the 12 months up to March.
The value of new homes built in the March quarter also dropped -2.8 per cent and was down -12.7 per cent from the same time last year.
Although the total number of homes commenced was up 1.2 per cent at 43,312 projects for the quarter, this was still down -6.4 per cent on last year’s figures.
However, a boost in new home sales and positive auction results in June could sway the data upwards in coming months.
Peak body HIA reported that new home sales had jumped 77.6 per cent in June compared to May, and the implementation of HomeBuilder could further bolster the results—although some economists say this still won’t be enough.
Number of new homes built
^ Source: ABS, CommSec
CommSec senior economist Ryan Felsman said lower inbound migration, high unemployment and weaker home prices were likely to see home building continuing to ease during the remainder of 2020.
“Residential home builders and construction workers were already under pressure prior to the pandemic due to the weak Aussie economy,” Felsman said.
“The federal government’s HomeBuilder stimulus, together with state government stamp duty concessions and new home owners’ grants, are expected to provide a boost to building activity in the latter part of the year.
“But lower population growth and the broader economic downturn present obstacles to the recovery.”
The ABS building activity figures for March also showed commencement on non-residential projects was up 0.7 per cent in the quarter and 3.9 per cent on the year; and renovations on existing residential buildings were up 1.4 per cent on the quarter and 1.8 per cent on the year.