Supply constraints continue to hold back project completions – HIA

More houses are being commenced than completed, new data shows

Supply constraints continue to hold back project completions – HIA


By Mina Martin

“Australian home builders are still struggling to complete the enormous pipeline of work they accumulated over the last two years,” believes Tom Devitt, HIA economist.

Fresh ABS’ building activity data for the June quarter 2022 showed that only 28,898 detached houses were completed in the three months to the end of June, down by 6.3% from the previous quarter; meanwhile 30,926 new detached houses started construction in the June quarter, down by 0.8% on the previous quarter and 27.9% from the peak a year earlier, but still 18.7% more than the same quarter in 2019.

“With more houses still being commenced than completed, Australian home builders now have 104,228 detached houses under construction, a record pipeline that is 81.2% larger than what existed pre-pandemic,” Devitt said. “Supply constraints are continuing to hold back completion of these projects. Materials constraints have plagued builders over the last two years, and shortages of skilled trades have only become more acute. These supply constraints will keep Australia’s home builders busy this year and next as they continue to work down this record volume of detached house projects.”

The multi-unit market is also continuing to strengthen. In the June quarter, multi-unit commencements dropped by 6.0% to 16,966, but this is still up on the lows of 2020. There was also improvement in both high-rise and medium density units.

“With interest rates and the cost of building increasing rapidly, affordability constraints will increasingly push home buyers back towards more affordable, higher density living and with the return of migration, demand for units should continue to strengthen,” Devitt said. “This increasing activity in the multi-unit market, combined with ongoing activity in the detached market, will sustain elevated demands for skilled trades and obscure the effects of increasing interest rates on the broader economy.”

Related Stories

Keep up with the latest news and events

Join our mailing list, it’s free!