The number of new houses and apartments on which construction started throughout Australia fell to its lowest level in twelve years in 2023/24, new data shows.

Released on Wednesday, the latest Building Activity data published by the Australian Bureau of Statistics shows that the seasonally adjusted number of dwelling commencements which took place throughout Australia declined by 1.1 percent in the June quarter to go from 40,751 in the March quarter to 40,293 in the June quarter.

The decline happened as a 1.7 percent rise in detached housing commencements was more than offset by a 7.4 percent contraction in commencements in the statistically volatile multi-units sector.

At this level, quarterly dwelling commencement activity remains at near decade lows (see chart).

Across the whole of 2023/24, the overall number of dwelling unit commencements which took place throughout Australia fell from 173,869 in 2022/23 to 158,732 in 2023/24.

This represents the lowest number of commencements since 2011/12.

At this level, the annual number of starts is falling well short of the 240,000 homes that are required each year in order to meet the national housing target of delivering 1.2 million new homes in well-located areas over the five years from 1 July 2024.

The data also showed that:

  • Across states and territories, the number of commencements fell across 2023/24 by 32.6 percent in the Northern Territory, 24.7 percent in Tasmania, 19.3 percent in New South Wales,1 percent In Queensland and 4.2 percent in Victoria. On the positive side, dwelling commencements rose by 12.6 percent in the Australian Capital Territory and by 1.3 percent and 0.7 percent in South Australia and Western Australia.
  • Around 62.5 percent of dwelling commencements which took place in 2023/24 were for detached houses, with multi-units (units, townhouses, apartments etc.) making up the remainder.
  • The number of new homes that were completed across 2023/24 came in at 176,831 – well short of the annual 240,000 level that will be needed to reach the national housing target.
  • The number of homes which are under construction has come down from its peak of 243,180 as at September 2022 to still elevated levels of 221,533 at June 30 this year. At this level, the number of homes under construction is roughly similar to that seen during the apartment building boom of 2016 to 2018.
  • Across all sectors (residential, commercial and public buildings), the overall dollar value of building work done throughout Australia contracted by 1.6 percent over 2023/24 to go from $137.3 billion in 2022/23 to $135.1 billion in 2023/24 (constant dollar terms).

Whilst 2023/24 was a challenging year for new housing starts, however, conditions are now expected to improve going forward.

In its latest forecast, Housing Industry Association says it expects the number of new dwelling commencements across Australia to increase modestly to reach 168,780 during the current financial year before returning to historically healthy levels of 192,250 in 2025/26.

 

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