High-rise apartment commencements crash

The ABS has released dwelling construction data for the March quarter, which recorded another sharp quarterly fall in commencements, driven by apartments.

According to the ABS, the number of dwelling commencements fell by a seasonally-adjusted 5.6% over the March quarter and were down by 25% over the year. Detached house commencements actually rose by 3.1% over the quarter but fell by 9% over the year, whereas unit commencements fell by 16.4% over the quarter and by 42% over the year:

As shown above, annual house commencements ran moderately above the long-term average in the March quarter, whereas apartment commencements continue to run strong despite crashing in Q4 2018 and Q1 2019.

At the state level, the commencements have fallen heavily across all mainland jurisdictions, but rebounded a little in VIC in Q1:

Actual dwelling completions (which lag commencements) fell 0.2% over the March quarter and were down 0.3% over the year. Detached house completions rose by 3.1% over the quarter and were up by 7.5% over the year, but this was more than offset by the 4.2% fall in apartment completions over the quarter and the 9.1% decline over the year:

Again, annual house completions are running moderately above their long-run average, whereas apartment completions are running way above average.

At the state level, the overall quarterly decline in completions was driven overwhelming by NSW (-16.0%):

Tomorrow, I will update the data plotting dwelling construction against population growth.

[email protected]

Unconventional Economist

Leith van Onselen is Chief Economist at the MB Fund and MB Super. Leith is an economist and has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.

Latest posts by Unconventional Economist (see all)

Comments are hidden for Membership Subscribers only.