Dwelling supply lags further
New dwelling commencements fell -11 per cent in the March quarter to around 48,000, seasonally adjusted.
These figures are yet to show the deleterious impact of several interest rate hikes this year and the tax changes in the Federal Budget, so new dwelling starts will likely fall further as we move into 2027.
Completions continued to be slower still, at only 43,800 for the March 2026 quarter.
As a result, the number of dwellings counted as 'under construction' increased again, to around 243,000.
The main increase in the dwelling supply pipeline has been driven by units under construction around many parts of Brisbane and regional Queensland (as noted here previously).
The wrap
The divergence between dwelling commencements (48,000) and completions (43,600) continued in the March quarter.
There's no doubt that dwelling supply hitting in the market has been far slower than had been hoped for.
The reasons for this are presumably multi-faceted, with cost escalation for materials and trade, delays, and developer insolvencies all likely to be salient factors.
In any case, immigration has been higher than expected, while dwelling completions have been lower than expected, accounting for record low rental vacancy rates.
Looking ahead, cost pressures look likely to remain an issue for developers.
The amount of work yet to be done in the non-residential space expanded to a record high in the March quarter, driven by the unprecedented boom in data centres approved, the CapEx investment being heavily concentrated in New South Wales and Victoria.
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