dwelling-commencements-march-2023.jpg

Despite the increase in the building activity for apartments and units, it appears overall commencements are still not enough to meet the housing targets.

According to Australian Bureau of Statistics (ABS), there were 26,285 new houses that started construction over the first quarter of the year. This figure was lower by 16.4% from last year and 39.1% from the peak in the June quarter of 2021.

Meanwhile, there was a surge in higher density dwelling commencements, which went up 44.8% during the quarter.

Overall, dwellings under construction increased 1.3% to 240,813 during the quarter — new houses accounted for 103,778 of this figure.

Master Builders Australia chief economist Shane Garrett said the sharp increase in higher density home building and public sector home building is desperately needed at a time of severe rental accommodation shortages.

“The figures show around 175,000 new homes were completed across Australia over the year to March 2023 which is expected to house about 440,000 people across the country,” he said.

“This is still falling short of the 200,000 homes needed per year.”

Master Builders Australia CEO Denita Wawn said this makes it crucial for state and federal governments to prioritise housing over the coming years.

“We need to pull out all the stops. That’s why it’s vital the Housing Australia Future Fund legislation is passed as quickly as possible,” she said.

In October last year, the federal government pledged to address the housing supply and affordability crisis by targeting to build one million well-located homes over five years starting 2024 through the National Housing Accord.

“Building enough of the new homes we need is difficult against the backdrop of rising interest rates, high costs and hesitant demand — any unfavourable changes to the rules and regulations that apply to home builders magnify these challenges even further,” Ms Wawn said.

For Housing Industry Association senior economist Tom Devitt, the decline in detached housing commencements over the first quarter of the year is part of the ongoing cooling of the market, which is likely to continue into next year.

“New home sales have declined sharply since the RBA started increasing interest rates last May,” he said.

“This is compounding the high volume of earlier projects that are being cancelled across the nation as homebuyers struggle to secure finance in the face of ballooning home building and finance costs.”

Mr Devitt said these conditions led to the first quarter in almost three years that Australia has completed more houses in a three-month period than it has commenced.

Overall, 28,094 detached houses were completed in the first quarter of 2023, 9.6%fewer than in the same quarter last year.

“There remain almost 104,000 houses under construction in the first quarter of 2023,” Mr Devitt said.

“Ongoing labour constraints continue to make it very difficult for builders to complete the significant volume of work taken on during the pandemic.”

While there was an increase in multi-unit commencements, the current level was down from the apartment boom that lasted from 2015 to 2016.

“There are still 136,000 multi-units under construction around Australia — these need to be completed in order to help accommodate the rapid return of overseas migrants, students and tourists that Australia has seen since it re-opened its borders in late 2021,” Mr Devitt said.

Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.

Update resultsUpdate
Filters
LenderHome LoanInterest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees LVR Lump Sum Repayment Additional Repayments Split Loan Option TagsFeaturesLinkCompare
6.04% p.a.
6.06% p.a.
$2,408
Principal & Interest
Variable
$0
$530
70%
 Featured Online ExclusiveUp to $4k cashback
  • Immediate cashback upon settlement
  • $2000 for loans up to $700,000
  • $4000 for loans over $700,000
5.99% p.a.
5.90% p.a.
$2,396
Principal & Interest
Variable
$0
$0
80%
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
6.14% p.a.
6.16% p.a.
$2,434
Principal & Interest
Variable
$0
$250
60%
  • Find out your loan eligibility in 2 minutes or less
  • Complete your application in less than 20 minutes
  • Low fees and fast approval times
5.95% p.a.
5.95% p.a.
$2,385
Principal & Interest
Variable
$0
$0
90%
5.94% p.a.
5.95% p.a.
$2,383
Principal & Interest
Variable
$0
$0
90%
Important Information and Comparison Rate Warning

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of .

-

Photo by @abohaphiez on Canva.

Collections: