The ABS has released dwelling construction data for the September quarter of 2015, which suggests that Australia’s record dwelling construction boom is approaching its peak.
According to the ABS, the number of dwelling commencements rose by a seasonally-adjusted 0.5% over the September quarter and were up by just 2.0% over the year. Detached house commencements rose by 3.5% over the quarter and were up by 2.3% over the year, whereas unit commencements fell by 1.6% over the quarter but were up by 1.7% over the year (see below charts).
As shown above, house commencements ran moderately above the long-term average in the September quarter, whereas apartment commencements continue to boom.
At the state level, the recent strong rise in commencements has been driven by New South Wales, Victoria, Queensland and Western Australia; although only New South Wales recorded strong growth in the September quarter, and the other major capitals look to be past their peak (see next chart).
Actual dwelling completions (which lag commencements) recorded minimal growth over the September quarter, rising by just 0.1%, but were up by 3.9% over the year. Detached house completions rose by 0.9% over the quarter and by 13.8% over the year, whereas apartment completions fell by 1.2% over the quarter and by 8.3% over the year (see below charts).
Again, house completions are running moderately above their long-run average, whereas apartment completions are still running well above average.
At the state level, Victoria, New South Wales and Western Australia have registered strong growth in completions over recent times, whereas Queensland and South Australia look to be correcting (see next chart).
Given that dwelling approvals peaked in March 2015 (see next chart), and the latest slowing of commencements, the housing construction boom looks to be nearing its peak.
So for now it looks like MB’s forecast that actual dwelling construction would decline from mid-2016 remains on track.
Tomorrow, I will update my charts tracking population growth against approvals, commencements and completions across the major capitals.
