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During the year ended September 2016, there were over 229,000 dwellings that commenced construction around Australia, having eased slightly since its peak in March 2016, according to one industry body.
The Housing Industry Association says that despite the decline in total commencements, the detached house segment has proven resilient.
There were 29,634 detached houses starts in the September 2016 quarter, taking the total to 115,953 commencements in the year to this point.
The HIA said the prevailing dynamics in the detached house market in 2015-16 were “a marked contraction” in the level of activity in Western Australia, counter-balancing the ongoing resurgence in the Victorian and New South Wales markets.
“While there were variations in other state and territory markets, when we take a national perspective, these two factors eclipsed the rest. However, we are now well into 2016-17 and approaching a new phase of the cycle which will have a fresh dynamic,” the association said.
“The headwinds afflicting WA may soon subside and Sydney and Melbourne’s time in the sun may be drawing to a close.”
Detached house commencements are forecast to ease nationally by 1.7 per cent in 2016-17, ahead of a further decline of 7.3 per cent in 2017-18.
The level of detached house building is forecast to gradually improve, after a predicted fall to a low of 104,800 starts in the 2018-19 year.
The multi-unit market has weakened overall, the HIA said.
“After a very strong result in the March 2016 quarter, the number of multi-unit commencements fell away quite sharply throughout the middle of the year,” it said.
“However, there are markedly different trajectories for the semi-detached market, including townhouses, row and terrace-type dwellings, and the market for apartments in buildings of four or more storeys.”
The association said the number of commencements for semi-detached dwellings continued to grow throughout the year.
“In contrast, the number of commencements for apartments in high-rise developments slowed as activity in Victoria and Queensland eased.
“The flow of new apartment projects getting under way in New South Wales has remained more buoyant and there is a record level of apartments in developments awaiting commencement.”
In aggregate, there were a total of 25,202 multi-unit dwellings commenced in the September 2016 quarter, which is equivalent to 113,383 across the full year.
The HIA forecast multi-unit dwelling commencements will remain at “quite a high level” in the 2016-17 financial year, albeit with an annual decline of 11.3 per cent.
“Looking beyond 2016-17 is when we anticipate commencements will post more significant declines,” it said.
It forecast a decline in multi-unit commencements by around 25 per cent in 2017-18 and by a further 12 per cent in 2018-19.
The 2018-19 year is projected to be the low point of the cycle for multi-unit commencements, when 68,400 starts are forecast to occur.
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