Record quarter for detached home construction

RESIDENTIAL construction is full steam ahead despite the industry struggling with labour and material shortages compounded by COVID-19 restrictions.

Figures released by the ABS show the value of work done on detached houses surged in the June quarter to reach the highest level on record, exceeding the previous record set in March.

Housing Industry Association (HIA) economist Angela Lillicrap said the ABS preliminary data on construction work undertaken across all states and territories for the June quarter of 2021 confirmed an elevated volume of work was occurring across all regions.

“HomeBuilder and low interest rates have been a key driver of the record volume of detached home commencements,” she said.

“This demand for housing is also coming from a shift in the location of the population and a move to lower density housing.

“The average number of people per house has been falling since the 1980s and COVID may have accelerated this trend.”

The data also reveals labour shortages and supply chain restraints has led to fewer homes reaching completion in the normal construction timeframes.

The HIA is cautioning that delay in the supply of materials will see the impact on labour and ancillary services remain elevated well into the second half of 2022.

Master Builders Victoria (MBV) also raised concerns with the effect of building material shortages on the industry.

“Current conditions have seen a reduced capacity in supply chains for building products not only across Australia but overseas as well,” CEO Rebecca Casson said.

“We also understand from talking to many of our members that the extent of the delays and the cost increases vary greatly, and they depend on the contractor, their suppliers, and their locations – and we know this is a very real problem across our industry.”

The HIA also indicated that a decline in new homes under construction should be anticipated from mid-2022 when homes initiated by HomeBuilder reach completion.