Government stimulus drives record demand in new housing construction

By Cameron Micallef 15 April 2021 | 1 minute read

The government’s HomeBuilder stimulus has led to a two-decade high in new houses that commenced construction, official figures have revealed.

Government stimulus drives record demand in new housing construction

Stats released by the Australian Bureau of Statistics showed that house commencements surged by 27 per cent in the final quarter of 2020, which is their highest level since March 2000.

All states and territories saw gains, led by Western Australia, which saw commencement of new houses double in the final quarter.

This was followed by the Northern Territory, Queensland and NSW, which all saw growth rates between 50 and 20 per cent. 

HIA’s chief economist, Tim Reardon, credited the HomeBuilder stimulus package for the surging demand, highlighting the strong lift in the six months since the program commenced. 


“Demand for detached housing is also being supported by the record-low interest rates and the shift in population away from metropolitan centres towards the regions,” Mr Reardon said. 

“The sudden realised potential of working from home has opened up new areas for housing demand that previously may have been considered too distant.”

Despite strong growth at the back end of 2020, the chief economist believes strong demand will continue to drive the construction sector in 2021. 

“The record volume of home building will continue to retain jobs and absorb workers from across the rest of the economy,” he said. 

“This isn’t the peak of building commencements. We anticipate that commencements will reach a new peak in mid-2021. This will see a very strong level of building activity into the middle of 2022.

However, the strong growth in detached housing dwelling has not come across to the multi-unit sector. 

“Multi-units starts saw a more modest increase of 4.6 per cent in the final quarter. This sector is still a long way down from its previous peaks and need an injection of overseas migrants, students and tourists if it is to contribute more to Australia’s economic recovery,” concluded Mr Reardon.

About the author

Cameron Micallef

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your... Read more

Government stimulus drives record demand in new housing construction
Government stimulus drives record demand in new housing construction
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