Victoria builds, builds and builds

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The Australian Bureau of Statistics (ABS) has just released building activity data for the September, which presents yet another mixed bag:

The overall value of bulding work done was essentially flat over the quarter (up 0.1%), but with some major variances across sectors:

  • The seasonally adjusted estimate of the value of new residential building work done fell 1.9% to $9,528.1m. Work done on new houses fell 2.6% to $6,400.6m, while new other residential building fell 0.3% to $3,127.5m.
  • The seasonally adjusted estimate of the value of non-residential building work done in the quarter rose 2.7%, following a 1.5% fall in the June quarter.
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Turning to the residential housing sector, the total number of dwellings completed during the September quarter fell -4.7%, with houses falling -4.2% and units and apartments falling -5.6%.

The below chart provides a longer-term perspective, whereby dwelling construction has essentially remained range bound since 1988:

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Victoria continues to dominate the nation’s dwelling construction, accounting for 35% of the nation’s home building over the quarter. Victoria also experienced a nice bounce, with dwelling completions bucking the trend and rising by 4.4% over the quarter:

Going forward, it will be interesting to see whether the New South Wales changes to first home buyer stamp duty concessions – which will apply to new builds only after 30 December 2011 – will lead to a corresponding increase in dwelling construction in that state.

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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.