Home building activity jumped 14% to 46,546 dwellings during the March 2023 quarter, fueled by higher density and public sector home building. 

The Australian Bureau of Statistics found that apartment building activity soared 57.2% to 19,344 dwellings during the three months to March, while house building declined 5.5% to 26,026 dwellings. 

Master Builders Australia Chief economist Shane Garrett said there was an encouraging increase in the number of new home building starts during the first three months of 2023 driven by higher density home commencements which soared by 44.8% during the quarter. 

“56% of the 240,000 new dwellings under construction at the end of March were higher density,” Garrett said.   

“The sharp increase in higher density home building and public sector home building is desperately needed at a time of severe rental accommodation shortages. At the end of March, over 4,200 new public sector homes were under construction, close to its highest in 15 years. 

 “Disappointingly, the number of new detached house starts dropped by 5.5% over the same period. The figures show around 175,000 new homes were completed across Australia over the year to March 2023 which is expected to house about 440,000 people across the country. This is still falling short of the 200,000 homes needed per year,” Mr Garrett said. 

Master Builders Australia CEO Denita Wawn said despite some of the positive trends, the task of meeting housing demand over the coming years should remain a priority. 

“State and federal governments are to be commended on their efforts to prioritise social and affordable housing. However, we need to pull out all the stops. That’s why it’s vital the Housing Australia Future Fund legislation is passed as quickly as possible,” Wawn said. 

“Building enough of the new homes we need is difficult against the backdrop of rising interest rates, high costs and hesitant demand. Any unfavourable changes to the rules and regulations that apply to home builders magnify these challenges even further. 

“Governments must make it easier not harder for our industry to do its job effectively and actively pursue productivity boosting policies. The proposed changes in industrial relations will increase the cost of creating new homes by taking a sledgehammer to productivity and tying the hands of business in red tape.”