The RBA and Treasury’s plan for housing construction to fill the void as the mining investment boom unwinds took another hit today, with dwelling completions data for the March quarter of 2013, released by the Australian Bureau of Statistics (ABS), showing minimal uplift.
In fact, according to the ABS, the total number of dwellings completed over the March quarter fell by 3.4%, with the 4.1% increase in detached house construction more than offset by a 16.0% fall in unit and apartment construction (see next chart).
The news is slightly better in annual terms, with overall dwelling construction rising 2.9% over the year, with detached house construction up 3.7% and unit & apartment construction up 1.3%. ALthough, as can be seen below, construction levels are barely at the 30-year average, despite the 45% increase in Australia’s population over this period (see next chart).
In fact, as noted previously, dwelling construction rates across Australia have falling significantly since the mid-1990s, with detached house construction bearing the brunt (see next chart).
At the state level, the fall in overall dwelling construction over the quarter was driven by New South Wales (-15.1%), Queensland (-11.3%), and South Australia (-8.1%), which more than offset rises in Victoria (+4.1%) and Western Australia (+0.7%):
Overall, there’s not much joy in this data, with dwelling construction failing to launch despite the significant cuts to interest rates and first home buyer subsidies from New South Wales and Queensland. Land prices are simply too high, which is pricing many would-be buyers out of the market.
