HomeBuilder driving record year for new houses

Fresh forecasts indicate 2021 is likely to be a record-year for detached homebuilding, with more than 130,000 new houses to commence construction across the country.

The Housing Industry Association’s latest forecasts show the federal government’s HomeBuilder scheme is the major catalyst for the boom in housing construction, which is occurring across all states.

““HomeBuilder has delivered. All leading indicators show a record volume of detached homes about to commence construction and this is occurring in almost every location across Australia,” HIA chief economist Tim Reardon said. 

“This has not only secured the employment of the 500,000 people employed in detached home construction, it will also absorb tens of thousands of workers from across the rest of the economy. 

“The extension of HomeBuilder in November is the primary cause of this significant upgrade in our forecast but the demographic shifts are also driving demand for detached homes.” 

Mr Reardon said regional locations in many states were experiencing a larger increase in activity than capital cities, as the population moves away from inner-city living. 

However, the strong conditions for detached houses are a stark contrast to the outlook for the multi-residential sector, Mr Reardon said. 

“The loss of overseas migration hit the multi-unit sector immediately and the number of new unit starts is falling rapidly,” he said. “The population shock is yet to flow through to detached. 

“The constraint on building more than 130,000 detached homes this year will be the availability of residential land.

“Land development slowed in 2020 when the restrictions were introduced and will limit the number of homes that start construction this year.

 “Skilled trades will be in high demand but the slump in apartment construction will see these trades shift to detached home building.”

Mr Reardon said while demand would continue into 2020, the boom conditions would not likely last. 

“The record year has been facilitated by HomeBuilder, low interest rates and a significant shift in population,” he said.

 “We anticipate that all of these trends will move against home building in 2023 along with the impact of the loss of overseas migration.”