New detached houses on the rise, while unit development eases in the ACT: HIA

An increase in new detached house builds and renovation activity will be welcomed by the housing industry, as multi-unit development is projected to taper off.

The Housing Industry Association’s latest ACT report was released this week and showed that new dwelling starts increased by 19.8 per cent during the 2015/16 financial year.

However, a 12.2 per cent decrease is projected for 2016/17, followed by a further contraction of 6.9 per cent in 2017/18.

HIA ACT executive director Greg Weller said the strong 2015/16 figures were boosted by a rise in multi-unit starts, while it was a weak year for detached houses.

Construction of 4843 dwellings commenced in the ACT during the financial year, but only 1007 of these were detached houses.

It was the weakest year for detached homes in the last decade, representing a decline of 34.3 per cent.

“Other dwellings” accounted for the other 3836 new builds – a new financial year record and a 52.7 per cent increase on the previous year.

“The detached house market is set to grab a larger slice of new home building output in the ACT over the next few years,” Mr Weller said.

According to the report, detached dwelling starts are forecast to jump 58.3 per cent to 1594 this year.

The report said the multi-unit sector had experienced exceptional growth over the last few years and activity was expected to recede.

Multi-unit starts are forecast to fall by 30.7 per cent in 2017/18 and by a further 15.7 per cent in 2018/19.

“With overall new home building activity forecast to weaken, the renovations side of the market is expected to continue growing and will act as a welcome pillar for residential building,” Mr Weller said.

The ACT home renovations market grew 7.2 per cent during 2015/16 to $370 million.