The overhang

Melbourne's unit starts

There was a big quarterly lift in new apartment commencements in Victoria in the first quarter of 2020, though if you smooth the figures out on a rolling annual basis the jump looks far less pronounced. 

Of course, population growth will slow very sharply in 2020, and so too, therefore, might the speed and progress of dwelling construction.

Indeed, the actual value of residential building undertaken did slow quite sharply in the first quarter. 

Dwelling completions in the two largest states are now slowing from their highs, especially for attached dwellings.

And overall dwellings under construction were steady at around 189,000, which is about 18 per cent below the 2018 peaks of 231,000. 

That this figure held up has also largely been thanks to Melbourne's attached dwellings.

And, finally, dwellings approved but not yet commenced slowed to the lowest level since 2015, with the New South Wales backlog now normalising. 

The wrap

Overall, it looks as though a resurgent Melbourne kicked off a new round of apartment construction in 2019 and early 2020 which will likely exceed demand for some time, at least until the international borders are reopened.

However, the speed of construction will also most likely be slowed to compensate. 

Elsewhere construction activity had already been normalising for several years, especially in the new apartment sector.