Dwelling commencements will fall by more than 11 percent this year as the market for new home construction continues to climb down from recent record highs.
Releasing its latest report, Housing Industry Association said it expected the overall number of dwelling commencements throughout Australia to drop by 11.2 percent from 196,809 in 2018/19 to still historically respectable levels of 174,675 in 2019/20.
Multi-unit commencements will drop from 85,108 in 2018/19 to 72,459 in 2019/20 whilst detached home starts are expected to fall from 111,701 in 2018/19 to 102,126 in 2019/20 before contracting further to 101,087 in 2020/21.
HIA Chief Economist Tim Reardon said data in respect of new home sales, building approvals and housing finance all suggest that demand for new homes has stabilised amid cuts to interest rates and income taxes as well as an easing of APRA restrictions.
He says the market will not return to recent highs but is stabilising at higher levels in patterns which are consistent with population trends.
“We do not anticipate that the market will recover the ground lost over the past year, rather the market is calibrating to a new equilibrium consistent with demographic growth,” Reardon said.