Unit construction outpacing house building
For the first time on record, there are more units being built than houses.
CoreLogic analysis of building activity data from the Australian Bureau of Statistics (ABS) shows there were more new units built in the December 2016 quarter than houses. During this period, new house starts were down 3.4%, while new unit commencements were up 3.9%.
“When you look at the individual state data, the number of new units under construction in New South Wales is continuing to climb to new historic highs while the number under construction in Victoria and Queensland, where concerns around inner city unit supply are more pronounced, is now clearly trending lower,” CoreLogic researcher Cameron Kusher said.
Kusher said it was likely building commencements would fall in the months ahead.
“With dwelling approvals falling significantly from record high levels since December 2016, it’s reasonable to expect that there will be fewer commencements going forward, particularly for units. On the other hand, unit completions could remain high for some time given that there are still many houses and units under construction,” he said.
Even with no additional commencements, Kusher said it would take over a year for existing stock to clear.
While commencements in New South Wales kept trending higher, they fell in Victoria and Queensland. Kusher said this was likely related to unit oversupply concerns in inner-city Melbourne and Brisbane.