New home starts drop to 7-year low

Commenting on the research, Master Builders chief economist Shane Garrett said: “The fall in new home starts was more pronounced in the high-density part of the market where a 21.9 per cent decline occurred during the September 2019 quarter.”

“This was due to a number of one-off factors, including the reputational issues around apartments during the middle of last year as well as the adverse fallout from the banking royal commission and its detrimental impact on credit,” he added.

Despite the “disappointing” figures, the latest indicators around building approvals and house prices “do suggest that a resumption of growth in new home building is not too far off”, Mr Garrett said.

“Having recently sagged to a decade low, engineering construction did take a small step in the right direction during the September 2019 quarter. Engineering activity is positioned to benefit the most from the host of new infrastructure projects announced in recent times.

“It is taking longer than we would like to see new infrastructure announcements translate into real action on the ground. The figures today provide welcome evidence that activity here is finally gaining ground, albeit it gradually,” Mr Garrett said.

“There remains a strong onus on government to ensure that infrastructure project work is still delivered as quickly as possible so that the considerable gap in economic growth can be closed.”