The number of new homes beginning construction in the June quarter increased for the first time since December 2017, according to ABS data.
However, even with the 1.1% improvement in new home starts over the quarter, they remained 20% lower than the corresponding period the year before.
“The increase in total starts was due to a 21% lift in multi-unit starts, mainly in NSW and WA,” explained Tim Reardon, HIA Chief Economist.
Conversely, detached housing starts are at their lowest level since December 2013 — a trend that looks to be changing.
“More recent data informs us that the downturn in detached home starts has slowed. The impact of three cuts to interest rates and small fiscal stimulus has slowed the decline in work entering the pipeline,” said Reardon.
However, the economist believes the market is not yet at the bottom of its cycle.
“The slowdown in building activity over the past 18 months has adversely affected the national economy and has been one of the main drags on GDP growth,” he said.
“A return to normal lending conditions would provide a boost to home building and the wider economy.”
Annual housing starts during the 2018/19 financial year fell in all states and territories, with the exception of the Australian Capital Territory (+17.8%) and Tasmania (+5.3%).
The largest annual fall was recorded in the Northern Territory (-28.4%), followed by South Australia (-22.6%), Victoria (-17.8%), Western Australia (-14.3%), Queensland (-13.9%), and New South Wales (-13.1%).