QLD leads fall in dwelling commencements

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By Leith van Onselen

The Australian Bureau of Statistics (ABS) has just released dwelling unit commencements data for the December quarter, and it’s another poor result.

In seasonal adjusted terms, total dwelling unit commencements fell by -6.9% in the December 2011 quarter, which follows a -6.0% fall in the September quarter. In the 12 months to December 2011, dwelling unit commencements fell by -13.4%.

A mainland state-by-state breakdown is provided below:

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Queensland has led the slump, accounting for almost half of the decline in national dwelling commencements. By contrast, Tasmania and New South Wales were the only states to record positive growth over the quarter.

Victoria maintained it’s status as the nation’s housing construction capital, although the level of commencements has fallen by around 20% over the past two quarters and the gap between it and the other states has narrowed.

The quarterly national as well as state and territory change in commencements is as follows:

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  • National (-2,510 or -6.9%);
  • New South Wales (+41 or 0.6%);
  • Victoria (-944 or -7.3%);
  • Queensland (-1,219 or -17.9%);
  • Western Australia (-156 or -3.3%);
  • South Australia (-391 or -15.4%);
  • Tasmania (+33 or 5.7%);
  • Northern Territory (-60 or -20.3%); and
  • Australian Capital Territory (-239 or -18.5%).

According to the ABS, private sector units and apartments bore the brunt of the decline in commencements, falling -13.9% over the quarter. By contrast, commencements of private sector houses fell by only -2.7%. The below chart plots the long-run trends of both components (note: data is not seasonally adjusted):

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Combined with the dramatic slump in new home sales in January, this release is likely to heighten calls from the Housing Industry Association for renewed housing stimulus and cuts to interest rates, instead of a more productive review of supply restraints and increased disincentives for investing in established property.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.