After reaching a record high in the March 2016 quarter, the number of houses and units under construction eased slightly over the June 2016 quarter, falling by 3.6% and 2.1%, respectively. In spite of the decline, the level remains to be exceptionally high on an historic basis.
Most of the houses under construction are located in Victoria, NSW, and WA.
Completion levels were also higher than commencement levels during the said quarter. According to the latest data from CoreLogic, there were 29,866 houses and 22,680 units commenced compared to 32,207 houses and 25,893 units completed. In fact, unit commencements are down 29.2% and are at their lowest level since December 2014.
“The data shows rising completions and given the large pipeline of dwellings under construction, we should expect quite high volumes of completions over the coming quarters,” said CoreLogic head of research Cameron Kusher.
Dwelling approvals also reached record-high numbers at the end of the June 2016 quarter, increasing by 15.6% from the previous quarter. These 9,185 houses and 29,713 units are yet to commence.
“There seems to be a significant supply of housing to be built over the coming years,” said Kusher.
“However, we anticipate that the trend towards a lower proportion of approved stock reaching commencement to continue to increase as a mature construction phase makes it more difficult for developers to achieve sufficient presales to progress to construction.”
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