Residential building disappoints
Residential building failed to rebound in the June 2024 quarter, disappointing expectations, as more and more construction firms have gone bust and apartment building doesn't stack up.
The quarterly drop was largely accounted for by activity in the state of New South Wales.
Detached house construction is picking up, driven by Western Australia's nascent supply response.
Attached dwelling construction is really the doldrums, though, especially in Sydney, Melbourne, and Brisbane, where developers can't turn a meaningful profit, outside of a few thriving coastal locations.
There's also a high level of competition with public infrastructure works, where activity has still been running at very elevated levels.
The opposition Coalition announced that, if elected, the party will can Labor's Housing Australia Future Fund (HAFF), which is designed to deliver 30,000 homes over 5 years (albeit with none actually built to date).
Overall, the supply response looks set to pick up for houses in Perth and some other locations, but there will be a major shortage of units, apartments, townhouses, and duplexes over the next few years.
The high level of insolvencies in the construction sector has driven up building costs over recent times, and most suburban unit developments aren't stacking up profitably.
The below chart from CBA sums it up well:
James Foster ran through the key facts and figures here.
