New units outweigh houses for first time on record
Building activity data released by the Australian Bureau of Statistics last week confirms more newly-built units were completed over the December 2016 quarter than houses – the first time on record.
Over the December 2016 quarter, 28,102 new houses and 28,527 new units were completed. This marked the first quarter on record where the completion of new units outstripped new houses.
New house completions rose by 0.7 per cent over the quarter while new unit completions surged 26.1 percent to a new record high.
Ground was broken on 28,690 new houses while 27,887 new units commenced construction.
New house commencements were 3.4 per cent lower, while new unit commencements increased by 3.9 per cent.
According to CoreLogic research analyst Cameron Kusher there has been little change in the number of houses under construction over recent quarters. In contrast, new unit construction remains historically high – but is likely to fall.
“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,” he says.
The number of new houses and units approved for construction but not yet commenced amounted to 9,814 houses and 29,044 units, according to the ABS data.
The number of new houses approved but not commenced increased by 5.0 per cent over the quarter while the number of new units fell by 11.7 per cent from its historic high the previous quarter.
New house and unit completions have averaged 43,497 a quarter over the past five years.
“Even if there were no additional new commencements based on this run rate it would take almost five quarters for the stock to clear,” Kushner says.