New home builds continue to slow with bumpy road predicted without vision
IN SPITE OF a permanent uplift in demand for lower density housing, new home building starts have dropped again during the June 2022 quarter – the fourth consecutive quarterly reduction – according to the Australian Bureau of Statistics (ABS) Building Activity figures released today.
Master Builders Australia CEO Denita Wawn said while the volume of new detached house starts was still higher now than it had been in the lead up to the pandemic, the phasing out of exceptional fiscal and monetary stimulus propelling new home building starts means today’s figures "are not surprising".
According to the latest ABS figures, there was a 2.7 percent fall in new home building starts during the June 2022 quarter. This included a 3.1 percent reduction in the number of new medium/high-density home commencements, and detached house starts inched down only marginally at 0.2 percent.
“Despite the volume of new home starts dropping over the past year, there were still over 240,000 new homes under construction at the end of June," Ms Wawn said. "This is higher than ever before and is related to the supply bottlenecks in the building pipeline which are slowing the pace at which new homes can be built.
“However, over the next three years, Master Builders forecasts that new home building starts will fall significantly short of 200,000 per year, the volume of output that will be needed to meet demand. Our forecasts indicate this threshold will not be exceeded until 2026.
“Our 2022-26 residential forecasts predict a bumpy road with a downturn over the next few years," she said. "Forecasts will trend upwards as inward migration and interest rates stabilise, and pent-up demand shifts the dial.
“The building and construction industry continues to be frustrated with lengthy delays in approvals for land title, building applications, and occupation certificates. Shortage of land in the right places, high developer charges, and inflexible planning laws also restrict opportunities to meet the housing needs of our future.
“We look to working with the Federal Government to assist with finding and delivering solutions,” Ms Wawn said.