Housing starts eased back during the December quarter, new data shows.

But commencements are likely to increase in 2025 as approvals have been on a steady rise since the middle of last year.

Released by the Australian Bureau of Statistics, the December quarter Building Activity report indicates that the seasonally adjusted number of dwellings that were commenced during the December quarter of last year eased back by 4.4 percent to remain at historically modest levels of 41,911.

Commencements contracted in both detached housing and multi-residential construction (units, townhouses, apartments etc.).

Across calendar 2024, dwelling commencements came in at a modest 168,049. This is up by just 1.7 percent on last year and represents the second lowest number of annual calendar starts since 2012.

The data also shows that:

  • The number of dwellings under construction has eased back to historically normal levels of 213,834. This is well down from the peak of 243,280 dwellings under construction that was recorded during the September quarter of 2022.
  • The number of dwellings that were completed remained relatively unchanged at 45,157 during the quarter and came in at 177,313 across calendar 2024 (up slightly from 175,395 in calendar 2023). This is well below both the 60,000 quarterly average dwellings and the 240,000 average annual dwellings that are needed to achieve the national housing target of delivering 1.2 million new homes over the five years from 1 July 2024 as per the National Housing Accord.

Whilst the data is not encouraging, it should be noted that building approvals have been on an improving trend since the middle of last year. This has been led by a recovery in multi-unit residential housing.

To the extent that approved projects make it through to construction, this should result in improving commencement numbers throughout 2025.

Indeed, several forecasting firms have suggested that a stronger recovery in housing starts will take hold from the middle of this year.

Nonetheless, building industry lobby groups say that more needs to be done to unblock new housing delivery.

“These numbers show why both political leaders need to make number one priority in this federal election,” said Col Dutton, National President of the Urban Development Institute of Australia said.

 

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