20 July 2021
The contrast between Australia’s detached dwelling and apartment markets has become increasingly apparent following last week’s release of March quarter building activity data.
The Australian Bureau of Statistics figures show that national detached dwelling commencements rose by 5.9% q-o-q and were 40.6% higher than they were a year earlier. In fact, the quarterly commencement figure of 36,395 (seasonally adjusted) was the highest quarterly result on record and followed a near record December quarter.
The fall follows a shift in focus for developers, many of whom have adjusted their pipeline to build higher quality, downsizer product for owner occupiers in lieu of large-scale investor product – demand for which is largely reliant on international border re-openings, overseas migration and the return of international students.
The ABS stats have also provided further evidence of the impact of the Federal Government’s now completed HomeBuilder stimulus package.
The combination of the HomeBuilder stimulus (with 121,363 grant applications reported as at April 9, representing 82% for new builds), low interest rates, and support for first homebuyers has been clear, and commencements should remain strong over the remainder of 2021 before easing as the HomeBuilder grant construction commencement deadline (now at 18-months from contract date) passes.
However, one negative has emerged for this surge in activity, in that pressures are becoming apparent in the areas of labour availability and materials capacity.
This has the potential to lead to higher building costs, although this is very much a double-edged sword, with the residential building boom proving to be a significant generator of jobs and economic benefits.
The Australian Bureau of Statistics figures show that national detached dwelling commencements rose by 5.9% q-o-q and were 40.6% higher than they were a year earlier. In fact, the quarterly commencement figure of 36,395 (seasonally adjusted) was the highest quarterly result on record and followed a near record December quarter.
The fall follows a shift in focus for developers, many of whom have adjusted their pipeline to build higher quality, downsizer product for owner occupiers in lieu of large-scale investor product – demand for which is largely reliant on international border re-openings, overseas migration and the return of international students.
The ABS stats have also provided further evidence of the impact of the Federal Government’s now completed HomeBuilder stimulus package.
The combination of the HomeBuilder stimulus (with 121,363 grant applications reported as at April 9, representing 82% for new builds), low interest rates, and support for first homebuyers has been clear, and commencements should remain strong over the remainder of 2021 before easing as the HomeBuilder grant construction commencement deadline (now at 18-months from contract date) passes.
However, one negative has emerged for this surge in activity, in that pressures are becoming apparent in the areas of labour availability and materials capacity.
This has the potential to lead to higher building costs, although this is very much a double-edged sword, with the residential building boom proving to be a significant generator of jobs and economic benefits.

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