Australia now has more detached homes under construction than at any other time since records began in 1960, the latest data shows.
And the pace at which new work is coming into the multi-residential construction sector has picked up.
Released last week, the December quarter Building Activity report from the Australian Bureau of Statistics shows that overall, the seasonally adjusted number of dwelling unit commencements which occurred throughout Australia came in at 51,679 during the quarter.
This is down 13.5 percent from 60,515 in the September quarter and well below the June quarter peak 67,619 following the expiration of the deadline for the Commonwealth Homebuilder program in March.
Nevertheless, it still represents an annual commencement rate of more than 200,000 dwellings.
This implies a level of residential building activity which has never been seen at any time since ABS records began in 1955 except for during the apartment building boom of 2015 to 2018.
Such a level of activity occurred even as the December quarter was impacted by construction shutdowns in New South Wales and Victoria.
Across calendar 2021, ground broke on a whopping 228,378 dwellings – the highest level on record for any calendar year except for the 234,395 dwellings which were commenced in 2016.
Not surprisingly, momentum is being driven by ongoing strength in the detached house segment of the market.
In this sector, single detached house dwelling commencements came in at a seasonally adjusted number of 32,424 for the quarter.
At this level, single detached home commencements are well below their June peak but remain above any other level seen prior to COVID stimulus.
Across calendar 2021, single detached home commencements came in at 147,764 – the highest number on record in any calendar year since the previous peak of 166,371 detached house commencements in calendar 1988.
Moreover, the pipeline of work in single-detached house building is sitting at levels never seen before.
Across the nation, 101,022 single-detached houses were under construction as at December 31.
This is more than 40 percent higher compared with pre-covid levels of 57,496 in December 2019 and represents the highest level recorded since the dataset commenced in 1960.
In addition, a further 15,257 homes are approved but awaiting commencements (also a record).
Taken together, this takes the pipeline of singled detached homes which are either approved or under construction to more than 116,000.
Strength in the pipeline is broadly consistent across all states and territories, with the pipeline of detached home building at or near record levels in every jurisdiction.
Meanwhile, the data also shows that new projects in multi-residential construction have also picked up.
Across calendar 2021, ground broke on construction of 79,747 units, townhouses and apartments.
Whilst this was well-below annual commencement levels seen during the recent apartment boom, itis above both the 69,330 commencements which occurred during the COVID impacted 2020 and also above pre-pandemic levels of 69,602.
Housing Industry Association Senior Economist Tom Devitt welcomed the latest data – which he said was driven by strong employment conditions, rising house prices and consumer confidence.
Whilst commencements came off their peak in the second half of 2021, Devitt says this reflects a slowing after the peak of HomeBuilder projects in the June quarter and does not reflect a slowing market.
Indeed, he said other indicators, such as building approvals, finance approvals and new home sales, continue to show a strong volume of work entering the pipeline.
On multi-residential, Devitt noted that the upturn in commencements include an upturn in high-rise apartments as well as medium density units and townhouses.
This, he said, meant that investors ‘looked through the haze of the pandemic in 2021 with more optimism’.
Going forward, Devitt says the outlook is promising.
“Strong employment conditions, rising house prices and consumer confidence are continuing to support housing demand,” Devitt said.
“This boom is expected to continue supporting strong levels of employment into 2023.”