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Queensland leads nation for homebuilding strength

Timber-framed house being constructed in Mackay, Queensland
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Strong interstate migration numbers have helped propel Queensland's homebuilding sector to the top of Australia. Photo: Jackson Stock Photography/Shutterstock

Queensland leads nation for homebuilding strength

Queensland’s housing construction sector has been rated as Australia’s best-performing, as the nation’s homebuilding boom reaches record highs for new builds and renovations.

Queensland’s housing construction sector has been rated as Australia’s best-performing, as the nation’s homebuilding boom reaches record highs for new builds and renovations.

It was the first time since 2007 that Queensland has made it to the top of the Housing Industry Association’s Housing Scorecard, with its building industry benefiting most from the state’s ability to attract interstate migrants.

The scorecard provides benchmarks in each state for detached house building, multi-residential construction, renovations, housing finance, and overseas and interstate migration.

While HIA economist Tom Devitt said with construction markets booming in all states it was difficult to choose one state as the top performer, he said Queensland had made the most of its opportunities.

Mr Devett said interstate migration had offset much of the loss of overseas migrants, with more than twice the number of people moving from other states into Queensland than the average of the past decade.

“This ongoing population growth has combined with new population dynamics, government stimulus and record low interest rates to support demand for new housing in Queensland,” Mr Devett said.

“Detached house approvals in the last two quarters have been around 50 per cent above the decade average.

“Commencements and on-the-ground work are following  suit. Multi-unit activity is also picking up, with approvals back above the decade average by more than 20 per cent.

“This is consistent with Queensland’s shift to higher density living.” 

Winter 2021 HIA Housing Scorecard

  1. Queensland 69/100
  2. South Australia 67/100
  3. Tasmania 64/100
  4. New South Wales 62/100
  5. Western Australia 61/100
  6. Australian Capital Territory 58/100
  7. Victoria 57/100
  8. Northern Territory 30/100 

Queensland’s renovations sector was also the strongest in the country, tracking nearly double the 10-year average.

“The state had a significant pre-existing pipeline of storm repair work under way before the pandemic,” Mr Devitt said.

“Renovations activity has been pushed higher by HomeBuilder and recent shifts in household consumption away from travel and entertainment.

“The ability to maintain population growth has been a powerful tool to grow the economy of Queensland.

“This growth is likely to spur employment growth and ongoing confidence in the Queensland economy.”

South Australia maintained its number two ranking, with many residents who would have ordinarily have moved staying put due to the pandemic. 

Mr Devitt said this year was the first time since 2002 that South Australia had recorded a net inflow of interstate residents, an important factor supporting demand for new houses.

“South Australia’s relative response to HomeBuilder was stronger than any other jurisdiction,” Mr Devitt said. 

“This strength has helped offset the continued cooling of South Australia’s apartment market from its recent boom.”

Mr Devitt said this year’s biggest mover was Western Australia, which leapt from the bottom of the table into fifth place. 

“The exodus of residents from Western Australia that has occurred for several years has been reversed and there are encouraging signs that the multi-unit market might also pick up,” he said. 

After having been top-ranked for three consecutive years, Victoria slipped to 7th position, with a lack of international migration compounded by those exiting for other states. 

However, detached home builders in Victoria are operating at all-time high levels, with commencements 63 per cent higher than the average of the past decade. 

“HomeBuilder and low interest rates have driven this outcome,” Mr Devitt said. 

“Renovations activity has also surged as households spend more time at home and divert spending from other sectors such as overseas travel.

“In the absence of population growth, this record year of building will not be sustained.” 

In Australia’s most populous state, detached housing jobs under construction are currently 17.5 per cent above the 10-year average, while approvals are at their highest level since 1994. 

“Despite this strong performance compared to the average of the past decade, other states have outperformed NSW,” Mr Devitt said.

“This pushed the state down the rankings to fourth place.

“NSW was also the only state to receive a positive contribution from overseas migration, even if only a net inflow of 2,300 arrivals.

“New South Wales’ ongoing prospects will depend on the resumption of overseas travel.”

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