It means that the new home sector is well into recovery mode, according to the Housing Industry Association (HIA), the voice of Australia’s residential building industry.
In seasonally adjusted terms, the number of dwelling commencements increased by 8.2% in the last three months of last year. Detached house commencements fell by 0.7% but multi unit commencements increased by 21.3%.
Victoria saw an increase of 11.3%, Queensland 15.8% and South Australia growth of 25.2%. There was also a rise of 2.8% in New South Wales. But commencements declined by 1.3% in Western Australia, by 12.6% in Tasmania, by 13.3% in the Australian Capital Territory and by 26.6% in the Northern Territory.
‘The data provides confirmation of what leading indicators had been implying, that the new home building industry rounded out 2013 on a strong note,’ said HIA economist Geordan Murray.
He pointed out that original figures show there were 47,326 dwellings commenced in the December quarter which was the strongest quarterly result since 2002, even surpassing the highs during the period impacted by the GFC stimulus.
He also said that throughout the duration of the recovery to date, growth has been driven primarily by the New South Wales and Western Australian markets. ‘Given that the level of activity in these two markets has now reached historic highs, growth beyond the current levels could to be more difficult,’ he explained.
‘Interestingly, it was neither New South Wales nor Western Australia that drove the growth in the December quarter. Dwelling commencements in New South Wales rose by a relatively modest 2.8%, while commencements in Western Australia declined by 1.3%’ added Murray.
He pointed out that the most notable contributor to the strong growth in dwelling commencements in the December quarter was Victoria, with a jump of 11.3%, mainly due to a 33% rise in multi-unit commencements.
‘New home building activity in Queensland also grew strongly in the final quarter of 2013. It is encouraging to see the state’s housing recovery gathering momentum. Dwelling commencements lifted 15.8% in the December quarter to around 9,233 in the quarter. This is comparable with the healthy level of activity in middle part of the last decade,’ said Murray.
‘However, the composition of the dwelling types has changed markedly since then. Detached dwellings accounted for only 54% of the total dwellings commenced in the quarter, the smallest share on record for the state,’ he added.
South Australia also posted a strong result, however, Murray said that it is possible that the increase partially reflects activity pulled forward by the ending of the Housing Construction Grant. ‘We will need to allow time to assess whether the strong result in the December quarter is attributable to the change in policy settings or whether the state has indeed mounted a healthy recovery,’ he pointed out.
