Housing starts soar on HomeBuilder

146 views 2021-10-14 13:43:12

Australian housing construction soared in the June quarter, making a record 64,596 dwelling starts as detached houses soared to a new high and attached dwellings picked up to their highest level in almost three years.

While the low-ended HomeBuilder stimulus payments pushed detached house starts up to a seasonally adjusted 41,276 from 36,530 in the March quarter, the bigger surprise was the 46 per cent quarter-on-quarter jump to nearly 23,000 new semi-detached homes, apartments and townhouses.

“The combination of the HomeBuilder and other state-based housing grants and very low interest rates have lifted demand for new housing despite the collapse in net overseas migration,” CBA economist Kristina Clifton said.

The boost in commencements is a strong indication of continued housing construction activity for the next six to nine months, although home-building activity in the September quarter was likely to be subdued as a consequence of COVID-related disruptions and shutdowns in NSW and Victoria.

However, activity could be artificially slowed by the availability of builders and the cost and availability of materials such as timber, CommSec economist Craig James said.

The Housing Industry Association economist Tom Devitt said the increase in so-called attached dwellings came from increased approvals for medium-density housing and were a consequence of apartment investors “looking through the haze of the pandemic with greater optimism”.

Immigration-dependent Victoria enjoyed a 31.4 per cent increase in detached house starts, second only to NT (up 73.2 per cent) in the quarter.

Tasmania increased 24 per cent, NSW 16.2 per cent and Queensland 2.4 per cent. Standalone home commencements declined in ACT (-13.3 per cent), SA (-4.6 per cent) and WA (-1 per cent).

The figures indicated housing demand remained strong even after the end of the federal government’s HomeBuilder program, Ms Clifton said.

“It looks as if the “normal” level of approvals for detached homes is higher than before the pandemic,” she said.

“Working from home and the desire for more space may have seen a shift in preferences. The lack of foreign students, who tend to live in apartments, has dampened demand for multi‑units.”

The sustained growth of the detached-dwelling sector depended on the return of overseas migrants, students and tourists, the economists said.

 

This article is from Australian Financial Review, please click the following link for the original article: https://www.afr.com/property/residential/housing-starts-soar-on-homebuilder-20211013-p58zob

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