The latest ABS housing figures confirm the new residential construction sector as the top performer of the Australian economy.
“Despite a modest decline in new dwelling commencements in the June 2015 quarter, there was still a record number of 211,976 new homes started in 2014/15 – an increase of 16.9 per cent,” said HIA Chief Economist, Dr Harley Dale. “That is a phenomenal result which caps three consecutive years of growth for new residential construction – only the fifth time in the last 60 years that this feat has been achieved.”
“Through its broad reach the residential construction sector has delivered a strong economic dividend to Australia during a period when many other sectors of the economy have struggled,” commented Harley Dale. “New dwelling commencements will fall in 2015/16, but should remain elevated at what would still be the second highest level on record.”
“The key to the short term prospects is how much work in the pipeline is converted into actual activity – it’s not coming through as quickly now,” said Harley Dale. “An orderly decline in commencements in 2015/16 remains the most likely outcome. However, the credit rationing aimed at curbing investor activity is having a broad impact and risks generating a sharper fall.”
The ABS figures show there were 53,314 dwellings commenced during the June 2015 quarter, a decline of 3.2 per cent from an upwardly revised March quarter. Detached house commencements fell by 2.9 per cent in the June 2015 quarter to 28,046, while ‘other dwelling’ commencements declined by 4.9 per cent to 24,482.
The profile for national dwelling commencements continues to mask large regional differences. In the June 2015 quarter new dwelling commencements increased in South Australia (+12.0 per cent), Tasmania (+54.0 per cent), and the Australian Capital Territory (+76.4 per cent). Commencements fell in New South Wales (-1.6 per cent), Victoria (-0.5 per cent), Queensland (-9.6 per cent), Western Australia (-10.5 per cent), and the Northern Territory (-36.1 per cent).