Residential construction figures post quarterly record

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Australia’s residential construction boom has pushed past another milestone, with figures showing dwelling commencements hit a quarterly record over the three months to the end of September 2015.

The figures from the Australian Bureau of Statistics show the September quarter saw work start on more than 55,000 dwellings across the nation, a 0.5% increase compared to the June quarter.

Over the 12 months to September 2015 commencements increased by almost 11% to more than 215,000.

“[The] update for national new home building is a stellar result not only for the residential construction industry, but for the wider economy,” Housing Industry Association (HIA) chief economist Harley Dale said.

“New dwelling commencements hit a quarterly record level of 55,532 in the September quarter last year. The historical high of 215,329 commencements for the year to September 2015 is 15% above the previous peak of just over 187,000 ‘starts’ in 1994,” Dr Dale said.

While national construction numbers hit a record high over the quarter, performance varied from state to state.

Over the quarter new dwelling commencements increased in New South Wales (2.4%), Western Australia (1.7%), South Australia (1.2%), the Northern Territory (17.4%), and the Australian Capital Territory (0.4%).

Commencements fell in Queensland (1%), Victoria (3.8 %) and Tasmania (20.7%).  

According to the HIA, the current housing boom, which has also seen housing approval records broken, has proved to be a pillar of the economy in recent years.

“Over recent years households and businesses have faced a barrage of negative chatter about below trend growth and downside risks to the economic outlook,” Dr Dale.

“Throughout this time new home construction has posted one of its longest upcycles in history – providing substantial support to Australia’s economic output and levels of employment.”

Industry forecasts have predicted the construction surge will begin to taper-off over the coming year, which Dr Dale said accelerates the need for reform on the taxation on housing.

The Federal Government is currently preparing a white paper on taxation reform, with speculation surrounding that process suggesting an increase to the GST and changes to negative gearing could be proposed.

Both of those options have been criticised by property lobby groups and professionals, who believe they would have a negative impact on the industry.
 

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