Home building in Australia reaches strongest level since 2004

Home building in Australia is recovering with the states of Western Australia, New South Wales and Queensland leading the revival, according to the latest quarterly data from the Australian Bureau of Statistics.

There were 163,250 new homes started in the 12 months to September and although this was a fall of 2%, there has been an overall recovery since the trough of March 2012, says the Housing Industry Association (HIA), the voice of Australia’s residential building industry.

‘Looking past the spike in activity due to global financial crisis related stimulus, that is the strongest level recorded since 2004,’ said Harley Dale, chief economist of the HIA.

He explained that the recovery is being driven primarily by other multi units rather than detached housing. Both segments are growing, but annual commencements for detached houses are 9% below their 20 year average while commencements of multi-units are running at 35% above their 20 year average.

New building was up 8.6% in New South Wales, up 4% in Western Australia, up 2.4% in South Australia, up 1.9% in the Northern Territory and up 0.2% in Queensland. They fell 8.5% in Victoria, by 5.4% in Tasmania and by 32.7% in the Australian Capital Territory.

Meanwhile, figures from the Titles Registry in Queensland show that the state saw a strong increase in the number of lodgements in 2013. There were on average 3,240 lodgements per day during December 2013, well above the overall 2013 daily average of 2,640 lodgements.

‘These figures are good news for Queensland’s property market and shows continued optimism in the recovery of the economy and confidence in the policies of the government,’ said Minister for Natural Resources and Mines Andrew Cripps.

‘Construction is one of the four key pillars of the Queensland economy and strong property market activity is great news for economic growth and jobs in this sector. To average 3,240 lodgements in December 2013 compares favourably to the 2012 daily average of 2,470 lodgements and the 2,350 average per day recorded during 2011,’ he pointed out.

Cripps said the majority of lodgements during 2013 were title transfers, most of which were property sales, new mortgages and mortgage releases. ‘New lot creations also steadily increased during 2013, with an average of 3,460 new lots being created per month for building projects such as subdivisions and housing developments. This compares with the 2012 monthly average of 3,240 lot creations,’ he added.

The latest Property Council/ANZ Property Industry Confidence Survey shows that Queensland’s property industry is the most confident in the nation.

‘The sustained lift in confidence in the Queensland market during the past 12 months has been most recently driven by the ongoing recovery of the residential market. The survey results are another step towards an industry recovery and a more positive property cycle,’ said Kathy MacDermott, Queensland executive director of the Property Council of Australia.

‘A buoyant property sector is leading the broader economy out of the gloom that has prevailed in recent years bolstered by low interest rates and solid investor demand for both residential and commercial property,’ said ANZ chief economist Warren Hogan.