The Housing Industry Association (HIA) has predicted a new record for detached housing starts in the year to September with construction commencing on more than 146,000 homes, although the group warns this level of activity will unlikely be seen again for many years if not decades.
HIA economist Angela Lillicrap says the large volume of work underway will ensure the industry remains very active through until at least the second half of 2022.
"This is more than 20 per cent higher than the peak of the previous boom in 2018," Lillicrap says, following the release of the HIA's industry outlook report.
"Renovation activity is also at an all time high and likely to remain elevated for a number of years due to the nature of the COVID recession and house price growth."
She notes the combination of factors that have led to this boom is unprecedented, driven by the HomeBuilder program and low interest rates as well as a change in consumer preference away from high density areas.
"This level of activity is not likely to be seen again for many years, if not decades," she says.
"The key challenge for the industry has shifted from a slump in demand this time last year, to having sufficient supply of materials, labour and land to satisfy this demand.
"The extension of HomeBuilder's commencement deadline will help limit the impact of constraints imposed by land, labour and materials and ensure the elevated volume of detached homes will be sustained for longer."
In stark contrast, she explains multi-unit starts are anticipated to decline in 2020/21.
"The timing and speed of a recovery in overseas migration will have a significant impact on these forecasts," she says.
"If overseas migration returns sooner, or faster, than anticipated, then the trough of 93,500 new housing starts in 2023 will not be as deep as currently forecast. Equally, if the restrictions on skilled migration continue into 2022 the depth of the emerging slowdown in new detached starts will be exacerbated.
"The return to stable and certain population growth is central to stable economic growth."
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