Presenting its forecasts, Housing Industry Association (HIA) announced its expectation that the total number of dwelling launches throughout Australia will decrease from 171,000 in 2019/20 to 148,000 in 2020/21 before dropping to 135,200 in 2021/22.
One also must consider divergent trends for home types.
In multi-units, HIA anticipates that the number of starts will descend from 69,000 in 2019/20 to 43,400 in 2020/21 and 41,000 in 2021/22 – a level of building falling short of the more than 100,000 yearly levels of commencements recorded in this sector during this year’s house building boom.
In this sector, the vast majority of the decrease will affect high-rise apartments.
Yet the market for detached homes will thrive.
HIA anticipates that commencements in this segment will elevate from 102,000 in 2019/20 to 104,700 in 2020/21 before descending to 94,200 in 2021/22.
Referencing detached homes, HIA Chief Economist Tim Reardon declared that the market is supported by a number of trends:
A surge in detached-home sales has taken place in the wake of the Commonwealth HomeBuilder program.
The HomeBuilder program was positive for detached homes as a requirement to see construction contracts signed by December 31 to qualify rendered this program more challenging for larger and more complicated multi-storey projects.
This, Reardon says, will produce an acceleration of work into 2021.
In addition, a mixture of subdued prices, government support programs, record low interest rates and a relaxing of finance restrictions has coaxed first-home buyers back to the market.
In 2020, first home buyers comprise about 40 percent of the market – their most elevated market share in 10 years.
Reardon says further that consumer preferences have turned to lower density housing amid rampant COVID worries in multi-storey buildings.
And the trend toward rural and regional residents relocating to metropolitan regions stopped this year as students and young job seekers did not flock to the cities for school or jobs.
This will inspire demand in regional markets, mostly concentrated around detached houses.
And the character of COVID will inspire a preference for detached homes for those coming home to Australia from other countries.
Reardon said that most of these conditions are particular to COVID and that housing trends will revert to pre-COVID trends as trade and travel resume their normal state.
Beyond new house building, Reardon predicts a firm market for residential renovations.
These factors, he states, will see employment in house building progress into 2021.