Record high new home building could ease housing affordability concerns, ABS data

The latest ABS Building Activity data showed 2014 was a record year for growth in new residential construction, with double digit increases in the value of work and number of building starts in the year to December.

New residential dwelling commencements increased by 17.9% from the previous year totalling 197,972, in seasonally adjusted terms for 2014.

The ABS also found an increase of 2.8% in the value of new residential building work for the December quarter and an overall 11.6% increase for 2014 over the previous year.  

The Property Council of Australia’s Executive Director Residential Nick Proud said the record high levels of new home building could help Australia’s housing affordability concerns.

“We are seeing strong increases in the value of new residential construction work nationally, which combined with an increase in new commencements to record high levels just shy of the 200,000 mark for the year, is great news for homebuyers,” he said.  

“The more new homes we get onto the market, the more pressure will come off house prices”.

Proud said while the results were encouraging, the 10.6% fall in the new residential home starts for the December 2014 quarter should be treated with caution and closely monitored this year.

Earlier this year, research commissioned by the Property Council indicated that the housing deficit in Sydney alone could increase by 190,000 homes over the next 10 years.

“The key going forward is to have this increase in new supply spread further and more evenly across the states and territories, and maintain sufficiently high levels for the next several years,” said Proud.

“This will only be achieved if governments at all levels commit to implementing microeconomic reform, particularly in the areas of tax and planning, to unlock the growth potential of the property and construction industries.”

The affordable housing deficit continues to be a major concern among Aussies, with the federal Treasurer Joe Hockey, this week, announcing the launch of a new national taskforce to recommend ways to increase the supply of housing stock.

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