ABS data shows dwelling construction growth

Recent housing data points to a tentative recovery for the new home building industry



Recent housing data points to a tentative recovery for the new home building industry.

In seasonally adjusted terms, the number of all new dwelling construction increased by 8.2% in the final quarter of 2013.

But detached house construction remains weak, with the bulk of recent growth in construction coming from units and apartments, shows the latest ABS dwelling data for the December quarter.

Detached house building activity declined by 0.7% in the December quarter of 2013 while multi-unit building activity increased by 21.3% in the quarter.

The Housing Industry Association believes this shows the housing industry is picking up.

“Original figures show there were 47,326 dwellings commenced in the December quarter which was the strongest quarterly result since 2002, even surpassing the highs during the period impacted by the GFC stimulus,” said HIA economist Geordan Murray.
“Throughout the duration of the recovery to date, growth has been driven primarily by the NSW and WA markets. Given that the level of activity in these two markets has now reached historic highs, growth beyond the current levels could to be more difficult.”

But neither NSW nor WA drove the growth in the December quarter. Dwelling commencements in NSW rose by 2.8%, while commencements in WA declined by 1.3%.

The ABS also released construction activity data to December 2013. Seasonally adjusted numbers show residential construction by value around $12 billion a quarter across 2013, which is slightly higher than the fourth quarter of 2012. 

Only 23% of construction activity by value relates to residential development. This has fallen significantly since 2000 likely due to an increase in non-residential building activity.

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