The number of new homes commencing construction has increased over the June quarter – the first increase seen since December 2017.
According to research by the ABS, the number of new homes commencing construction over the quarter increased by 1.1 per cent.
Despite a small improvement in new home starts in the June quarter, they remain 20 per cent lower than the same period a year ago, noted HIA economist Tim Reardon.
“The increase in total starts was due to a 21 per cent lift in multi-unit starts, mainly in NSW and Western Australia. Detached housing starts have slowed to their lowest level since December 2013,” he explained.
“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.
“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. A return to normal lending conditions would provide a boost to home building and the wider economy.
“Indications are that the downturn in new projects entering the pipeline are starting to improve following cuts to interest rate but the market is not yet at the bottom of this cycle.”