Record year of house building underway
A record number of detached housing starts will occur in the twelve months to September 2021 with more than one-hundred and forty-six-thousand builds commencing construction.
That’s according to the recent HIA Economic and Industry Outlook Report that shows the starts will be more than 20 per cent higher than the peak of the previous boom in 2018.
The report includes updated forecasts for new home building and renovations activity for Australia and each of the eight states and territories.
HIA Economist Angela Lillicrap said the large volume of work will ensure the industry remains active through until at least the second half of 2022.
“Renovation activity is also at an all-time high and likely to remain elevated for a number of years due to the nature of the COVID recession and house price growth,” she said.
“This level of activity is not likely to be seen again for many years, if not decades.
“The combination of factors that have led to this boom is unprecedented and are driven by HomeBuilder and low interest rates as well as a change in consumer preference away from high density areas.
“The key challenge for the industry has shifted from a slump in demand this time last year, to having sufficient supply of materials, labour and land to satisfy this demand.
“The extension of HomeBuilder’s commencement deadline will help limit the impact of constraints imposed by land, labour and materials and ensure the elevated volume of detached homes will be sustained for longer.
The growth in detached starts was in contrast to multi-unit starts, which are anticipated to decline in 2020/21, where the nation’s closed boarders are having an impact in that sector.
“If overseas migration returns sooner, or faster, than anticipated, then the trough of 93,500 new housing starts in 2023 will not be as deep as currently forecast,” Ms Lillicrap said.
“Equally, if the restrictions on skilled migration continue into 2022 the depth of the emerging slowdown in new detached starts will be exacerbated.
“The return to stable and certain population growth is central to stable economic growth.”
Metricon general manager regional housing Phil Barrett said that Metricon has seen this big pickup in demand.
“As Australia’s leading home builder, we have an unprecedented volume of building starts set to occur in 2021,” he said.
“The success of the HomeBuilder scheme and lower interest rates have facilitated in a surge in demand for detached homes that ensures a record number of new detached homes will be built this year and into 2022.
“In regional areas we are experiencing record activity as savvy buyers seize the opportunity to secure a new home away from the city, with evidence that location is something customers are now looking at differently.
“With many organisations embracing working from home beyond COVID-19 restrictions, a home in a regional community is now being viewed more favourably – particularly if you are only commuting a few days per week as opposed to the full five days or can work entirely from home.
“The demographic shift in population towards regional locations and low interest rates will continue to drive demand for new homes over the months to come.”