Victoria’s new builds break boom record

“Renovation activity is also at an all-time high and likely to remain elevated for a number of years due to the nature of the COVID recession and house price growth,” she noted.

According to the director, this level of building activity – mostly driven by HomeBuilder, low interest rates and a change in consumer preference away from high-density areas – may not be witnessed again “for many years, if not decades”.

Looking ahead, the key challenge for the industry will become the decline of sufficient supply of materials, labour and land.

“The extension of HomeBuilder’s commencement deadline will help limit the impact of constraints imposed by land, labour and materials and ensure the elevated volume of detached homes will be sustained for longer,” Ms Nield said.

The timing and speed of the recovery in overseas migration may also have a significant impact on housing builds, she added.

“If overseas migration returns sooner, or faster, than anticipated, then the trough of new housing starts in 2023 will not be as deep as currently forecast. Equally, if the restrictions on skilled migration continue into 2022, the depth of the emerging slowdown in new detached starts will be exacerbated,” the director concluded.

Across the nation, there are more than 146,000 detached housing starts set to take place over the same period – more than 20 per cent higher than the peak of the previous boom.

Over the 2020-21 financial year, a record level of 137,170 detached housing construction will commence, which is 34.2 per cent than the previous financial year and almost 17 per cent higher than the peak of the previous boom in 2018.

Across the next financial year 2021-22, HIA expects around 121,000 starts, which could be the third strongest year on record.

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