New home building has peaked, but should remain at much-needed high levels over the coming year, a major housing association has said.
According to the Housing Industry Association (HIA), the construction of new homes over the past year beat the previous cyclical record by 15%.
“It is likely that new dwelling commencements peaked at a record level of 215,000 in the financial year just passed,” HIA chief economist, Dr Harley Dale said.
“This is an extraordinarily high level which is 15% above the previous cyclical record of 187,000 dwelling commencements achieved in 1994.”
While there has been more of a boom with apartment construction in the current upcycle, Dale says detached and low density commencements still made up over 70% of total new construction.
According to the HIA, detached house commencements are expected to have reached a level of 113,700 in 2014/15, 9% above the long term average. Multi-unit construction, on the other hand, is expected to reach 100,747, a whopping 117% above the long term average.
HIA expects a cyclical peak of nearly 214,500 total new dwelling commencements for the 2014/15 financial year, although Dale says there is a chance that the 2015 calendar year could deliver an even higher record due to a further surge in unit construction.
“In light of a number of unique characteristics to the current cycle there is a wide range of possible scenarios that could influence the trajectory of activity after the peak,” Dale said.
“The approaching down cycle is likely to be considerably smaller for detached house commencements than for multi-units. Governments’ policy failure means that there is unrealised demand for new detached housing due to a range of supply side constraints led by a lack of shovel ready land.”