Housing starts recorded a significant slowdown from December, according to the quarterly construction activity data for the Australian Bureau of Statistics (ABS) for December.
Housing starts fell 7.6% to a record low of 27,088 units since March 2017. Housing starts showed a much larger drop from 26.8% to 19,134, the lowest figure in a quarter since September 2013 and the largest quarterly decline since September 1974, when they decreased by 32.5%.
Housing and unit starts, however, remained above their long-term average despite landslides.
The movement of housing starts – their rise and recent drop – has been identified as the most notable change in the housing starts landscape in recent years, a said CoreLogic.
The property information provider also found that the rise of high-density construction of population was mainly due to the capitals of the three most populous states.
"Over the last five years, each state and territory has seen its units begin to reach record levels, illustrating a clear shift towards higher density development (this does not mean that isolated housing construction Neither has the period significantly increased). More recently, with the downturn in the real estate market and falling values, we are finding that developers are less prepared to undertake new projects, "said Cameron Kusher, an analyst at CoreLogic Research.
Kusher predicted that unit starts would continue to fall further in the coming quarters, while property values ​​remained sluggish, finances were soft and domestic investors and foreigners remained modest.
The ABS has shown that the annual number of housing starts has increased significantly in recent years. However, unit starts in a block from one to three storeys were relatively stable. The demand / supply ratio of medium-density housing remains much healthier than high-density products.
Higher-rise buildings have increased significantly in recent years, but are now starting to ease. This change reflects both the unit building boom and the increased cost of acquiring sites. The developers have requested permissions for high-rise buildings to optimize their performance, recover acquisition costs and maximize their profits, according to CoreLogic.
"Given that housing starts are expected to continue to decline, this decline does not negate the fact that many developers have paid high prices for acquiring sites. As a result, we were expecting that despite the predictions of fewer starts, the projects that will start will largely be larger apartment projects, "said Kusher.
However, CoreLogic stated that developers are at greater risk for larger projects. It is also more difficult to make enough pre-sales to start a project when there are more units to sell. "In order to maintain the profitability of projects, it is very likely that, as values ​​fall, housing starts continue to fall," said Kusher.
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