ABS releases March 2024 data on building activity in Australia

The latest numbers on building activity suggest a dark future for Australians desperate to lock down a home, with a national ambition to build 1.2 million new homes over the next five years already slipping out of reach.

Total dwelling commencements reached 39,715 in the March quarter, the ABS reported on Wednesday, a 0.5 per cent lift from the previous December quarter but a sharp 13.5 per cent slump from March 2023 to March 2024.

In the year to March, the total number of new home builds, which includes everything from detached housing to apartments, hit 158,798, the lowest number for a 12-month period since 2012.

If extrapolated out for five years, new homes in Australia would hit some 800,000, far below the federal government’s ambition to build 1.2 million new homes by 2029.

The March quarter delivered 41,329 new homes, a 9.5 per cent decline from the 45,643 homes completed in the December quarter.

“Today’s figures reveal the extent of the challenge and just how much we need to lift our game to hit our targets,” Property Council Group executive for policy and advocacy Matthew Kandelaars said.

 

“If housing supply stays this low, we will only manage to build around 830,000 homes over the next five years, leaving us a whopping 370,000 short.

 

“If we don’t start increasing the pace, we will miss what should be an achievable target by a country mile.

 

“Governments across the country need to utilise every possible measure to assist the industry deliver the supply of new homes we so desperately need.”

New private sector house starts lifted 4.8 per cent to 25,072 in the March quarter, but other residential options fell 3.1 per cent to 14,071.

The value of total building work done in the quarter tumbled 3.5 per cent from December to $33.4bn.

From March 2023 to March 2024, the value of total building fell 1.8 per cent.

Thursday’s closely-watched jobs data release could also deliver some more tough news for battlers, with economists warning of an expected rise in the unemployment rate.

“The number of job ads on SEEK has slipped by 17.1 per cent across the year to date, while the number of applicants per job ad has risen dramatically,” eToro market analyst Josh Gilbert said.

“You don’t have to be a statistician to figure out that this means we’re seeing Aussies out of work growing increasingly concerned in a tightening job market, as wages also slip below pre-pandemic levels.”

The jobs release will also offer some guidance on potential Reserve Bank of Australia interest rate movements.

“The RBA will likely still want to see unemployment rise to somewhere between 4.25 per cent and 4.75 per cent before year’s end in order to quash this persistent period of inflation,” Mr Gilbert said.

“Figures outside of the official unemployment statistics do seem to indicate that we are on track for increased joblessness nationwide.

“There is clearly a balancing act for the RBA to manage and another hike may drive unemployment much higher than they would like, which is why for now, rates are likely to stay on hold rather than move higher.”

The International Monetary Fund, in its world economic outlook update for July 2024, has downgraded Australia’s GDP growth projected to 1.4 per cent for the year, down from a 1.5 per cent projection in April.