- 12 months to September will see over 450,000 building starts
- Represents a level 17% higher than the last boom in 2018
- HIA Executive Director warns without migration, new builds could fall significantly in 2023
The Housing Industry Association (HIA) has released its economic and industry Outlook Report which contains updated forecasts for new home building and renovations across the nation, with Victoria is set a record year of house building.
During the 12 months to September 2021, over 450,000 detached building starts will occur – a figure that is almost 17% higher than the peak of the 2018 boom.
Victorian Executive Director Fiona Nield said this large volume of work will ensure a high level of activity for the industry until at least the second half of next year.
“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,” said Ms Nield.
“This level of activity is not likely to be seen again for many years, if not decades. The combination of factors that have led to this boom is unprecedented and are driven by HomeBuilder and low interest rates as well as a change in consumer preference away from high density areas.”
Fiona Nield, HIA Victoria Executive Director
By contrast, multi-unit starts are expected to decline overall for 2020/21 and continue to do so in 2021/2022.
Ms Nield added the industry has experienced extreme opposites over the past year – fluctuating from trough-like demand to potentially not being able to meet the demand for materials, labour and land.
She warns that while this will be the industry’s key challenge for now – if overseas migration doesn’t return sooner, it could lead to a deep fall in housing starts.
“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.”
“The timing and speed of a recovery in overseas migration will have a significant impact on these forecasts. If overseas migration returns sooner, or faster, than anticipated, then the trough of 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,” concluded Ms Nield.