New home starts slip down under
The ABS Building Activity update for the December 2012 quarter shows a 2.3 per cent decline in new home commencements from an upwardly revised September quarter, which the Housing Industry Association has described as a “reasonable” performance.
“Consistent with the recent trend, ABS revisions to the September quarter figures added around 2,600 homes to the quarterly total. This implies there was a 7.4 per cent increase in activity during the September 2012 quarter rather than the 2 per cent reported previously,” said HIA Economist, Geordan Murray.
“Off this upwardly revised base the December quarter posted a decline of 2.3 per cent in aggregate dwelling commencements. There was a decline in the number of multi-unit dwelling commencements of 4.7 per cent while the count of detached dwelling commencements was consistent with the previous quarter,” added Murray.
“On the basis of these revisions and an okay showing in the December quarter, the second half of 2012 can be characterised as a reasonable rather than poor performing period for housing starts. In a signal of the challenge ahead to restore new housing to healthy levels, housing starts were still at a recessionary level in four states in 2012.”
Taking a look around the states, dwelling commencements (seasonally adjusted) increased by 0.3 per cent in Victoria, 0.4 per cent in Queensland, 40.1 per cent in South Australia, and 5.6 per cent in Western Australia. The number of commencements fell by 9.3 per cent in New South Wales, 17.4 per cent in Tasmania, 7.4 per cent in the Northern Territory, and 48.8 per cent in the ACT.
“There are signs that New South Wales and Western Australia are on a path to recovery, and the strong December quarter result for the recessed South Australia market is encouraging. In contrast, the signals for the remaining states and territories are weak,” Murray continued.
“The value of residential construction work done on new dwellings increased by 1.7 per cent in the December 2012 quarter. The increase was driven by a 2.3 per cent lift in the value of work done on detached dwellings while work done on multi-unit dwellings increased by a modest 0.5 per cent.”
Murray concluded: “It is pleasing to see a modest improvement in the larger renovations sector with work done during the quarter increasing by 1.4 per cent after recording two consecutive declines. Despite the modest lift in the last quarter of 2012, the total value of renovations work done in 2012 was 7.4 per cent lower than in 2011, confirming a decade low had been reached.”