The Housing Industry Association has forecast a record near-130,000 detached home starts for Australia in 2021, with a steep decline in numbers predicted early next year.
The Housing Industry Association has forecast a record 130,000 detached home starts for Australia in 2021, with a steep decline in numbers predicted early next year.
HIA released its economic and industry outlook report today, estimating that almost 130,000 new detached home starts would begin construction across the country in 2021.
The previous record of 120,000 starts in a calendar year was set in 2018.
HIA chief economist Tim Reardon said the federal HomeBuilder package had delivered on stimulating demand, with all leading indicators showing a record volume of detached homes about to start construction in almost every location across Australia.
“This has not only secured the employment of the 500,000 people employed in detached home construction, it will also absorb tens of thousands of workers from across the rest of the economy,” Mr Reardon said.
“The extension of HomeBuilder in November is the primary cause of this significant upgrade in our forecast but the demographic shifts are also driving demand for detached homes.
“Regional locations in many states are showing a larger increase in activity than capital cities as the population moves away from inner-city living.
“The strong conditions for detached homes are in stark contrast to the outlook for multi-units, which will continue to cool.”
That cooling was a result of a loss of overseas migration, he said.
HIA anticipates Western Australia will build about 5,000 new houses each quarter for the rest of the year.
Source: HIA economic and industry outlook report.
Mr Reardon said the availability of residential land posed a constraint on building more than 130,000 detached homes this year.
“Land development slowed in 2020 when the restrictions were introduced and will limit the number of homes that start construction this year,” he said.
“Skilled trades will be in high demand but the slump in apartment construction will see these trades shift to detached home building.
“The supply chain of building products will be stretched, but many building components are manufactured in Australia including cement, bricks, plasterboard and timber.
“The increase in manufacturing of these building components will also create employment.”
First homebuyers were driving significant demand for detached homes, with the group accounting for 43 per cent of new loans.
“We expect that this demand will continue into 2022 as the significant shift in population continues and as investors return to the market,” Mr Reardon said.
“This boom in detached home building will not continue.
“The record year has been facilitated by HomeBuilder, low interest rates and a significant shift in population. We anticipate that all of these trends will move against home building in 2023 along with the impact of the loss of overseas migration.”