The ABS has released dwelling construction data for the March quarter of 2015, which registered a solid pick-up in overall construction activity despite a significant divergence between the house and unit segments.
According to the ABS, the number of dwelling commencements rose by a seasonally-adjusted 8.6% in the March quarter and were up by 10.8% over the year. Detached house commencements rose by only 0.7% over the quarter and were up only 3.9% over the year, whereas unit commencements jumped by 20.1% over the quarter and were up by 20.4% over the year (see below charts).
As shown above, house construction ran slightly above the long-term average in March quarter, whereas apartment construction is booming.
At the state level, the recent rise in commencements has been been driven by New South Wales, Victoria, Queensland and Western Australia; although Western Australia experienced a contraction (-4.8% ) over the March quarter (see next chart).
Actual dwelling completions (which lag commencements) also recorded strong growth, increasing by 6.1% over the March quarter and by 24.5% over the year. Detached house completions rose by 4.0% over the quarter and by 21.1% over the year, whereas apartment completions rose by 9.2% over the quarter and by 29.4% over the year (see below charts).
Again, house completions are running just above their long-run average, whereas apartment completions are running well above average.
At the state level, Victoria, New South Wales, Queensland and Western Australia have also experienced strong growth in completions over recent times, with each jurisdiction also experiencing rises over the March quarter (see next chart).
Given the recent strength in housing approvals, and their correlation with commencements and completions, actual dwelling construction should continue to rise for the remainder of the year (see next chart).
However, as shown above, population growth is falling fast, which points to an imminent glut of homes, particularly in the apartment space.
