Positive signs in new home construction

The latest numbers by the Australian Bureau of Statistics (ABS) showed 43,247 new homes were commenced in the first three months of the National Housing Accord, which is 4.6 per cent higher than the June 2024 quarter and 13.9 per cent higher than the same quarter in 2023.

The strongest growth was in new detached house starts, rocketing 20.5 per cent since June 2024 and up 5.3 per cent over the year to September 2024.

While the growth in the number of new house starts is promising, there is still a long way to go to reach the level of output required to meet the Housing Accord target of 1.2 million homes, said peak building and construction industry body, Master Builders Australia.

Over the year to September 2024, the number of new homes commencing construction reached 165,048, well below the 200,000 required.

If building activity continues at this pace, Australia will commence construction on just over 825,000 new homes over the next five years, which is around 350,000 new homes short of the Housing Accord target, Master Builders Australia said.

“Our performance in apartment construction will be the key to whether we meet the target,” said Master Builders Australia CEO, Denita Wawn.

“Apartment construction levels remain too low because the investment appetite is not there.

"Low productivity, labour shortages, costly and restrictive CFMEU pattern agreements, a lack of supporting infrastructure and a high inflationary environment all contribute to project costs not stacking up.”

Wawn added the only way to solve the housing crisis is to build more apartments and make them more attractive for people to invest in.

“Only then will we see a lowering of rental inflation and more homes for Aussies.”