Although dwelling approvals remain at near record-high levels, the number of homes under construction showed a slight easing over the June 2016 quarter from a record-high in the March 2016 quarter.
At the end of the June 2016 quarter, there were 212,036 houses and units under construction nationally, consisting of 61,350 houses and 150,686 units. Over the quarter, the number of houses under construction fell -3.6% and there were -2.1% fewer units under construction. Although the number of houses and units under construction is lower, on an historic basis they remain at exceptionally high levels.
Looking at completion and commencement data shows that more dwellings were completed over the June 2016 quarter than were commenced. Over the quarter there were 29,866 houses and 22,680 units commenced compared to 32,207 houses completed and 25,893 units completed. The number of houses commenced rose 18.0% over the quarter while unit commencements were down -29.2% and at their lowest level since the December 2014 quarter. In terms of quarterly completions, 32,207 houses and 25,893 units were completed representing quarterly increases of 39.2% and 71.3% respectively. In fact, it was the highest number of unit completions on record over the quarter, 22.1% higher than the previous record high. The data shows rising completions and given the large pipeline of dwellings under construction we should expect quite high volumes of completions over the coming quarters.
At the end of the June 2016 quarter there was also a record-high number of dwellings which had been approved for construction but hadn’t yet commenced. Nationally, 39,359 dwellings were approved but not commenced, up 15.6% from the previous quarter. This is split between 9,185 houses and a record-high 29,713 units which had yet to commence. Over the past few years there has been a steady upswing in the number of units approved for construction but not commenced and we anticipate that this trend will continue.
Focusing on state and territory data on houses and units under construction clearly shows where supply of new housing has ramped-up.
The 61,350 houses currently under construction were split between: 16,861 in NSW, 18,861 in Vic, 9,062 in Qld, 4,516 in SA, 9,826 in WA, 1,289 in Tas, 325 in NT and 611 in ACT. The number of houses under construction was lower over the quarter in NSW, Vic, WA, Tas and NT and higher elsewhere. In WA the number of houses under construction is at its lowest level since September 2012 and in NT they are at their lowest level since June 2013.
The split across the states and territories for the 150,686 units under construction at the end of June 2016 was: 55,682 in NSW, 46,676 in Vic, 31,070 in Qld, 3,386 in SA, 8,396 in WA, 335 in Tas, 751 in NT and 4,390 in ACT. Qld, SA and ACT were the only states and territories to have a greater number of units under construction over the quarter. Qld currently has a record-high number of units under construction while in WA units under construction were at their lowest level since June 2014, in Tas they were at their lowest level since March 2014, in NT they were a their lowest level since September 2011 and in ACT they were at their highest level since September 2012.
Although commencements and the number of houses and units were lower over the June quarter they still remain at high levels on an historic basis. There remains a significant supply of housing to be built over the coming years however, we anticipate that the trend towards a lower proportion of approved stock reaching commencement to continue to increase as a mature construction phase makes it more difficult for developers to achieve sufficient presales to progress to construction. Furthermore, a number of these approved developments are probably being shopped for sale and therefore won’t necessarily be constructed during this current phase.