New home starts drop to 7-year low

By Emma Ryan 16 January 2020 | 1 minute read

The number of new home building starts has decreased to its lowest point since early 2013, according to ABS research.

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The research showed that new home building starts suffered an 11.7 per cent reduction during the September 2019 quarter. This represents a seven-year low.

Commenting on the research, Master Builders chief economist Shane Garrett said: “The fall in new home starts was more pronounced in the high-density part of the market where a 21.9 per cent decline occurred during the September 2019 quarter.”

“This was due to a number of one-off factors, including the reputational issues around apartments during the middle of last year as well as the adverse fallout from the banking royal commission and its detrimental impact on credit,” he added.

Despite the “disappointing” figures, the latest indicators around building approvals and house prices “do suggest that a resumption of growth in new home building is not too far off”, Mr Garrett said.

“Having recently sagged to a decade low, engineering construction did take a small step in the right direction during the September 2019 quarter. Engineering activity is positioned to benefit the most from the host of new infrastructure projects announced in recent times.

“It is taking longer than we would like to see new infrastructure announcements translate into real action on the ground. The figures today provide welcome evidence that activity here is finally gaining ground, albeit it gradually,” Mr Garrett said.

“There remains a strong onus on government to ensure that infrastructure project work is still delivered as quickly as possible so that the considerable gap in economic growth can be closed.”

About the author

Emma Ryan

Emma Ryan

Emma Ryan is the deputy head of content at Momentum Media.

Emma has worked for Momentum Media since 2015, and has since been responsible for breaking some of the biggest stories in corporate Australia, including across the legal, mortgages, real estate and wealth industries. In addition, Emma has launched several additional sub-brands and events, driven by a passion to deliver quality and timely content to audiences through multiple platforms.

Email Emma on: [email protected]Read more

New home starts drop to 7-year low
New home starts drop
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