The ABS issued their March 2015 data on Building Activity. The trend estimate of the value of total building work done rose 2.0% in the March 2015 quarter. The trend estimate of the value of new residential building work done rose 3.6% in the March quarter. The value of work done on new houses rose 3.9% while new other residential building rose 3.1%. The trend estimate of the value of non-residential building work done was flat in the March quarter. The most striking trend is the continued relative growth in the value of units, versus houses.
It was a strong result, reflecting the speculative demand for investment property. The data says 53,900 dwellings were commenced during the March 2015 quarter. Units = ‘other dwelling’ commencements (predominantly multi-unit) jumped by 19.2 per cent to 25,140 whilst detached dwelling commencements were steady, increasing by 0.7 per cent in the March 2015 quarter to 28,761. Victoria was a stand out with more than 9,000 multi-unit dwellings started in the quarter, which is a record. In the part year, March 2015, almost 205,000 new dwellings were commenced, and breaking the 200,000 barrier for the first time.
There are some significant state variations, new home starts increased in New South Wales (up by 1.9 per cent), Victoria (up by 18.8 per cent), Queensland (up by 20.9 per cent) and the Northern Territory (up by 12.0 per cent). But there were significant declines, most notably in South Australia, down 18.0 per cent, Western Australia (down by 4.8 per cent), Tasmania (down by 14.7 per cent) and the ACT (down by 14.4 per cent).
Now, here is the thing. Property building has gained significant momentum at a point where investment mortgage lending is being tightened, and consumer confidence is falling. We wonder whether the supply demand balance is about to swing, with more property on offer than capable purchasers.
