The Australian Bureau of Statistics (ABS) has released dwelling commencement data for the June quarter, which registered no change in the number of dwellings commenced, but a 9.8% increase over the year (see next chart).
The 9.8% annual rise in dwelling commencements has been broad-based, with detached house commencements increasing by 9.2% and unit commencements by 10.9%.
The overall level of dwelling commencements is now running 6% above the 30-year average, although construction rates remain low given the 45% increase in Australia’s population over this period (see next chart).
As you can see above, detached house commencements remain depressed – running 11% below the long-run average – whereas unit commencements are booming – running 47% above average.
At the state level, commencements rose in Queensland (+8.0%), Western Australia (+11.3%), and South Australia (+6.0%), but fell in New South Wales (-8.0%) and Victoria (-2.2%):
Overall, this is a disappointing release, with the overall number of commencements failing to launch despite the significant cuts to interest rates, rising dwelling prices, and first home buyer subsidies in effect in New South Wales and Queensland. Again, land prices are too high, which is preventing affordable stock from being provided and pricing many would-be buyers out of the market.
