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The number of dwelling commencements rose in the September quarter, but figures remain stubbornly below ambitious government targets.
The total number of dwellings that were commenced has been rising, according to seasonally adjusted data from the national statistical agency, the Australian Bureau of Statistics (ABS).
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New building activity data from the ABS showed that commencements rose 4.6 per cent in the September quarter, to 43,247 dwellings.
The growth was driven by new private sector houses, which were up 5.2 per cent on the previous quarter to 27,651 dwellings and 20.5 per cent up on the same period in 2023.
Other residential commencements in the private sector also increased, up 3.8 per cent to 14,677 dwellings in the quarter (or up 3.8 per cent over the year), contrasting with a 5.0 per cent fall in the previous quarter.
The value of total building work done rose 0.3 per cent to $38.5 billion.
The increase was driven by new residential building, which rose 2.2 per cent to $20.1 billion and follows an increase of 1.2 per cent in the June quarter. Work done on non-residential building fell 1.7 per cent to $15.1 billion, up 0.8 per cent compared to the same period last year.
In total, there were 220,265 total sector dwellings under construction in the quarter, of which 87,672 were new houses.
Government ‘kicking into a gale’ with housing targets
Despite building activity picking up, members of the property and housing industry have flagged that construction will need to accelerate much faster if the Australian government is to hit its housing target.
Master Builders Australia CEO Denita Wawn welcomed the rebound in new detached house construction, but said there was still a long way to go to reach the Housing Accord goal of 1.2 million homes.
Wawn said that if new home construction starts were to continue at the same pace as the year to September 2024, the government would fall roughly 350,000 short of its new homes target.
“Our performance in apartment construction will be the key to whether we meet the target. Apartment construction levels remain too low because the investment appetite is not there,” she said.
“Low productivity, labour shortages, costly and restrictive Construction, Forestry and Maritime Employees Union (CFMEU) pattern agreements, a lack of supporting infrastructure and a high inflationary environment all contribute to project costs not stacking up.
“If we are going to solve the housing crisis, we need to build more apartments and make them more attractive for people to invest in – only then will we see a lowering of rental inflation and more homes for Aussies.”
Similarly, the group executive for policy and advocacy at the Property Council, Matthew Kandelaars, said that the government was 15,000 homes behind its 2029 target just three months into the pledge.
Nationally, that equates to a more than 25.2 per cent shortfall for dwelling completions, he said.
The worst-performing region was the Northern Territory, which fell about 78 per cent below its target for the September quarter.
Similarly, NSW performed 40 per cent under target, while Tasmania was around 46 per cent under the government goal.
“Few expected we’d be meeting our welcome and ambitious housing target from day one, but it’s doing its job by providing transparency about who is lagging and by how much,” Kandelaars said.
“If we don’t start as we intend to finish, we’ll be kicking into a gale at the final break – making the job near impossible. There’s no time to waste and we can’t afford to slip any further behind.
“Our new home target is much more than an arbitrary number. It is what’s needed to close the national housing supply shortage. It represents hard hats, steel caps and getting Australian families into the homes they deserve.
“The work of the next term of the Federal parliament needs a laser-focus on helping states and territories do the heavy lifting required to meet our target. It’s evident from today’s data that some states are far better placed than others but all need a serious and immediate kick into action.
“The most urgent priorities are for states and territories to address affordability-killing taxes on new homes, cut red tape to boost productivity and address critical shortages of skilled labour.”
[Related: Government’s 1.2m housing target ‘a joke’, says Bragg]
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