Construction began on less new homes in the September quarter than a year earlier as conditions softened at the tail end of a massive year for builders, new data shows.
A total of 54,803 new dwellings commenced construction in the September quarter across Australia — down 2.2 per cent from the same period 12 months prior.
Housing Industry Association senior economist Geordan Murray said strong levels of new home starts early last year “underpinned one of the strongest years of residential building activity on record”.
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“Results for the second half of the year reflect the softening that has been evident in the broader housing market,” he said.
“Detached house starts were down by 4.5 per cent in the quarter but were comparable with the level of starts during the September quarter a year earlier.
“Starts of ‘other dwellings’, primarily apartments, were down by 7.1 per cent in the quarter and down by 5.3 per cent on the year-ago level.”
Mr Murray said while this was a “material decline”, it “can’t be considered a poor result” because it was still a strong level with a large amount of residential work underway.
“We’ll continue to monitor activity closely as leading indicators suggest that there were fewer new projects entering the pipeline in the latter stages of 2018,” he said.
“This is a warning bell for the trajectory of starts in 2019.
“As projects that are currently under construction reach completion there are likely to be fewer new projects coming in behind them. This applies to both the detached house market and the market for higher density dwellings.”
Total housing starts in the September 2018 quarter increased in Queensland (8.3 per cent), Western Australia (2.9 per cent) and in the Australian Capital Territory (41.5 per cent). Housing starts declined in South Australia (-18.6 per cent), Victoria (-16 per cent), Tasmania (-6 per cent), New South Wales (-5.5 per cent) and the Northern Territory (-2.9 per cent).