Home building hit new high in 2015

New home building activity is likely to have peaked last year, with an industry expert predicting fewer new home commencements in 2016.

Shane Garrett, senior economist at the Housing Industry Association, said recent figures released by the Australian Bureau of Statistics confirm that last year was the strongest ever for new home building activity.

“During 2015, just over 220,000 new dwellings began construction. This represents growth of 11 per cent on 2014, which was itself the previous record holder for new home activity,” Mr Garrett said.

NSW saw the largest increase in dwelling commencements last year at 19.1 per cent, closely followed by Tasmania (18.8 per cent) and Queensland (18.7 per cent).

New home building activity also grew in Victoria by 17.3 per cent, while the ACT experienced an increase of 6.0 per cent.

On the other hand, the Northern Territory saw the biggest decline in dwelling commencements – down 22.4 per cent – while commencements in Western Australia and South Australia fell by 12.0 per cent and 9.4 per cent respectively.

Mr Garrett said last year’s overall positive streak is unlikely to flow through to 2016.

“New home building is likely to have peaked last year and we will see fewer new homes started in 2016,” he said.

“Under current policy settings, new home building is then projected to fall below the levels required to provide for Australia’s long-term housing needs.”

Mr Garrett said this outcome can be avoided by tackling the taxation “burden” on new home building, speeding up the planning process and “doing more to deliver shovel-ready residential land”.

“In the absence of serious housing policy reform, there is a real risk that we will fall behind in the race for better living standards,” he said.

[Related: Building approvals in recovery mode]

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