Housing construction lags behind national demand

 

The most recent building activity data from the Australian Bureau of Statistics (ABS) reveals that the total number of dwelling commencements across Australia fell by 11.4 per cent over the year to June 2012.

 

Consolidating these figures in its latest Weekly Property Pulse update, RP Data reported that the number of dwelling starts over the June quarter was 13 per cent below the decade average, while domestic population growth as of March 2012 was 49 per cent higher than the decade average – figures that reflect the increasing disparity between housing supply and demand.

 

According to RP Data’s National Research Director, Tim Lawless, “the results highlight just how weak the housing construction sector has been since building activity started to fall in early 2010.”

 

Across all housing construction types, detached houses proved to be the weakest performers, where the ABS recorded that construction began on just 20,786 houses over the June quarter of 2012 (seasonally adjusted), a level which Mr Lawless confirmed as being approximately 21 per cent lower than the decade average of 26,189 starts.

 

Unit commencements, in contrast, saw an upswing over the June quarter, tracking almost three per cent higher than the ten-year average despite a recent slowdown from a historic high.

 

 

RP Data noted that in Victoria, where new home building starts led the nation since 2008, there has been a considerable slowdown in construction: 


 

“Between the beginning of 2008 and the end of March 2012, Victoria accounted for one third of Australia’s housing starts; this is despite Victoria’s population growth (i.e. housing demand) comprising a lower 25 per cent of the nation’s overall population increase. The number of dwelling starts fell by 18.4 per cent between June 2011 and June 2012, however, housing construction in Victoria remains 6% higher than the decade average,” Mr Lawless said.

 

There is a chance – however, that housing starts could pick up in early 2013 as the full force of current demand begins to be felt within the construction sector.

 

According to the HIA- RP data Residential Land Report, there was a significant increase in land sales over the June 2012 quarter:

 

“The June 2012 quarter saw residential land sales rise by 23.3 per cent to be up by 29.7 per cent when compared to the same period in 2011,” said HIA Chief Economist, Harley Dale.

 

“Growth is from a low base and the result is exaggerated by a policy induced pull forward in land sales in New South Wales and Victoria. Nevertheless, land sales did rise in all six capitals and in a majority of regional areas and that is an encouraging result,” concluded Mr. Dale. 

 

For more information on market conditions in your area, please contact your local CENTURY 21 Real Estate Agents, for clear and expert advice.

 

Posted by Charles Tarbey on 31/10/2012 at 12:00 AM | Categories:

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