New research from HIA shows that the low numbers of new houses under construction was a major issue well before the fiscal and physical pressures associated with COVID-19.
At the end of March, as the first restrictions started to come into play, there were around 188,000 new homes under construction. This was the lowest number since 2015.
While the figures note a modest lift in starts during the March 2020 quarter, many more houses were completed.
“As a consequence there are now fewer active building sites around the country,” said Geordan Murray, HIA Senior Economist.
The overall lift during the March quarter can be attributed to a 27.7 per cent increase in starts in Victoria. Conversely, there was a 12.2 per cent drop in New South Wales, and 20.6 per cent in the Northern Territory.
“The number of detached houses under construction has dropped by 20 per cent since the building cycle peaked in mid-2018,” he explains.
“With around 57,000 under construction at the end of March activity in this part of the market was already below the long term average before COVID19 struck.”
While the industry was already under pressure, the COVID-related shutdown and various other hurdles since March, further drops in building activity are expected once data is collated from the June quarter.
“It will not be until latter stages of 2020 that the lift in sales activity brought about by the HomeBuilder program will be seen on the ground.”
