New home starts dwindle

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A total of 54,803 dwellings commenced construction in the September quarter, according to the latest data from the Australian Bureau of Statistics (ABS). That’s a drop of 5.7% from the previous quarter and down by 2.2% year-over-year.

“Strong levels of new home starts early last year underpinned one of the strongest years of residential building activity on record. Results for the second half of the year reflect the softening that [has] been evident in the broader housing market,” said Housing Industry Association (HIA) Senior Economist Geordan Murray.

ABS also found that detached-house starts were down by 4.5% in the quarter but were on par with the level of starts during the same period in the past year. Starts of other dwellings, primarily apartments, on the other hand, were down by 7.1% in the quarter and down by 5.3% compared to the previous year.

While the numbers suggest a significant drop, they still cannot be considered poor results, according to Murray. The level of starts was still robust, and there is a large amount of residential building work underway. If anything, this is a warning bell for the trajectory of starts in 2019, he said.

Murray predicted that there would be fewer new projects after those currently being constructed reach completion.

Total housing starts in the September quarter rose in Queensland (8.3%), Western Australia (2.9%) and in the Australian Capital Territory (41.5%). Housing starts decreased in South Australia (-18.6%), Victoria (-16.0%), Tasmania (-6.0%), New South Wales (-5.5%) and the Northern Territory (-2.9%).

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