Government stimulus drives record demand in new housing construction

This was followed by the Northern Territory, Queensland and NSW, which all saw growth rates between 50 and 20 per cent. 

HIA’s chief economist, Tim Reardon, credited the HomeBuilder stimulus package for the surging demand, highlighting the strong lift in the six months since the program commenced. 

“Demand for detached housing is also being supported by the record-low interest rates and the shift in population away from metropolitan centres towards the regions,” Mr Reardon said. 

“The sudden realised potential of working from home has opened up new areas for housing demand that previously may have been considered too distant.”

Despite strong growth at the back end of 2020, the chief economist believes strong demand will continue to drive the construction sector in 2021. 

“The record volume of home building will continue to retain jobs and absorb workers from across the rest of the economy,” he said. 

“This isn’t the peak of building commencements. We anticipate that commencements will reach a new peak in mid-2021. This will see a very strong level of building activity into the middle of 2022.

However, the strong growth in detached housing dwelling has not come across to the multi-unit sector. 

“Multi-units starts saw a more modest increase of 4.6 per cent in the final quarter. This sector is still a long way down from its previous peaks and need an injection of overseas migrants, students and tourists if it is to contribute more to Australia’s economic recovery,” concluded Mr Reardon.

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