Unit starts soar while house building slumps

Apartment building is booming with higher-density building starts up by almost 45 per cent in the first quarter of this year, at the same time as free-standing home builds are down.

Figures released by Master Builders Australia show an increase in higher density and public sector home building, however the group says we are still falling short of our national housing target, with new house starts down by more than 5 per cent

Chief economist Shane Garrett said there was an encouraging increase (14 per cent) in the number of new home building starts during the first three months of 2023 driven by higher density home commencements which soared by 44.8 per cent during the quarter.

“56 per cent of the 240,000 new dwellings under construction at the end of March were higher density.

“The sharp increase in higher density home building and public sector home building is desperately needed at a time of severe rental accommodation shortages.

“At the end of March, over 4,200 new public sector homes were under construction, close to its highest in 15 years.

“Disappointingly, the number of new detached house starts dropped by 5.5 per cent over the same period.

“The figures show around 175,000 new homes were completed across Australia over the year to March 2023 which is expected to house about 440,000 people across the country. This is still falling short of the 200,000 homes needed per year,” Mr Garrett said.

Master Builders Australia CEO Denita Wawn said despite some of the positive trends, the task of meeting housing demand over the coming years should remain a priority.

“State and federal governments are to be commended on their efforts to prioritise social and affordable housing. However, we need to pull out all the stops. That’s why it’s vital the Housing Australia Future Fund legislation is passed as quickly as possible.

“Building enough of the new homes we need is difficult against the backdrop of rising interest rates, high costs and hesitant demand. Any unfavourable changes to the rules and regulations that apply to home builders magnify these challenges even further.”