Dwelling commencements fell in June quarter: ABS

The total number of dwelling commencements fell 11.8 per cent to 40,720 dwellings in the quarter ended 30 June 2023 compared to the end of the March quarter 2023 in seasonally adjusted terms, the latest Australian Bureau of Statistics (ABS) data on Building Activity has shown.

New private sector house commencements recorded a fall of 6.6 per cent to 25,162 dwellings from the March to June quarter 2023, while new private sector other residential commencements fell 19.6 per cent to 14,529 dwellings during this same period.

In terms of annual change, the ABS data revealed that new private sector house commencements fell 17.4 per cent (June 2022–23), other residential commencements down by 11.9 per cent and total sector dwelling commencements down by 15.4 per cent.

Furthermore, dwellings under construction fell 1.4 per cent to 237,779 dwellings in the June quarter, with new houses accounting for 101,820 of the dwellings under construction.

Additionally, the total number of completed dwellings across the country also fell, down by 7.5 per cent to 41,669 dwellings in the June quarter, with private sector other residential buildings driving the decline, dropping by 20.1 per cent to 13,379.

For the private sector, new house completions fell 1.6 per cent to 27,213 dwellings, after it rose 3.9 per cent during the March quarter. Annually, private sector new house completions are down 3.1 per cent.

However, the ABS further revealed that the total value of building work done rose 0.3 per cent to $31.5 billion in the June quarter, driven by new residential building work done with a rise of 1.2 per cent to $15.9 billion, following a drop of 0.4 per cent in the March quarter.

Construction costs beginning to stabilise

Preceding this data, the Cordell Construction Cost Index (CCCI) released by CoreLogic found that the quarterly growth rate for the cost of building a typical new dwelling rose 0.5 per cent in September, marking the smallest increase since the three months to June 2019.

CoreLogic head of Australian research Eliza Owen stated: “This is the fourth consecutive slowdown in the quarterly pace of growth for residential construction costs.

“The slowdown in new dwelling approvals also points to mixed news for the construction industry next year. On the one hand, this will free up capacity for material and labour resources, but it will also mean greater competition for new jobs.”

Over the past two years, the construction industry has been plagued by a myriad of issues such as supply chain problems, increased regulations and labour delays.

The Australian Securities and Investments Commission (ASIC) stated that insolvencies increased 72 per cent during the financial year 2023 as a result of these challenges.

[RELATED: Construction costs stabilise, bringing renewed demand]

Adrian Suljanovic is a journalist at Broker Daily with more than two years experience reporting on all facets of the third party distribution channel.

Adrian has written for a range of business and finance titles including IFA, Investor Daily and Lawyer’s Weekly before joining the mortgages team in 2022.

He graduated from the University of Wollongong in 2021 gaining a Bachelor of Communication & Media with a major in Digital & Social Media.

E-mail Adrian at: This email address is being protected from spambots. You need JavaScript enabled to view it.