Home Building highest on record but activity winding down: HIA
Home building across Australia’s housing markets has peaked as the total number of homes commenced by the nation’s top builders starts winding down, a report by the Housing Industry Association shows.
While building activity in 2017-18 was the strongest year on record at 222,000 new home commencements nationally, the total number of new homes built by the largest 100 home builders in the country fell by a small margin of seven homes to 74,565 from 74,572, the HIA–Colorbond Steel Housing 100 report shows.
“The number of homes built by the top 100 builders in Australia has fallen for the first time in five years,” HIA said, “That representation in all states has fallen, with the exception of builders from Victoria.
“In terms of building activity 2017-18 will be recorded as one of the strongest years on record … against this backdrop, it is surprising to see that the number of new homes built by the largest 100 home builders in the country did not increase.”
The slowdown in home building in Sydney and Melbourne – both cooling housing markets – was seen in new residential suburbs in metropolitan areas.
The report also found many builders have started insulating their businesses against a slowdown ahead by focusing in efficiencies in their business.
Echoing the cooling in off-the-plan apartment appetite among investors as bank financing and foreign buying curbs take effect, builders reported a decline in the number of apartment starts.
Metricon Homes increased its number of starts by 397 to be Australia’s largest builder for the third year in a row.
Metricon plans to navigate the housing downturn by being diverse in the types of homes it builds, Metricon director Peter Langfelder said.
While demand in multi-unit homes favoured by investors has dropped off, there are still plenty of demand for first homebuyers and those looking for smaller and more affordable homes like townhouses and attached homes on smaller lots, he adds.
“Diversification puts us in good stead,” Mr Langfelder said.
“Affordability is the number one challenge in the market. If you can also assist in the finance side of things there are also other opportunities.
“The market has come off a little bit, but mind you it has come off an extreme high base … and in some ways it is now a more normal market. The Australian dream hasn’t died, but the quarter-acre block is now out of reach for most people.”
Aside from changing dwelling preferences, regional areas outside of capital cities are also starting to become popular, Mr Langfelder adds.
But while demand and housing starts may be slowing, construction costs remain high, Mr Langfelder warns.
The second largest builder in Australia, Dyldam, commenced 701 more apartments in Sydney while the fastest mover up HIA’s list was Queensland-based apartment builder, Condev Construction.
The best-performing state is Victoria which despite cooling had a 17 per cent rise in building starts, with the 20 biggest builders in the state making 17.64 per cent more commencements in 2017-18 than the previous year.
“The record volume of new homes built in Victoria is a response to the state’s population boom and the huge growth in demand for housing,” the report said.
Related News
State of the Non-Residential Building Market in Victoria: A 2024 Overview and 2025 Outlook
State of the Non-Residential Building Market in Victoria: A 2024 Overview and 2025 Outlook Melbourne, Victoria – As 2024 draws to…
Phil To Take Part in Belated 2020 Tour de Cure Ride
He’s at it again – Consultive Founder and Director Phil Isard has been accepted to take part in his 5th…
Top Online Learning Resources for Construction Professionals
With the uncertainty surrounding COVID-19, fierce competition on the job market, rising job insecurity and the necessity of spending more…