Record Home Building Tipped to Continue

A unique opportunity, conceptualised in the wake of the COVID-19 pandemic, the initial incentive established by the Federal government offered a $25,000 grant to eligible applicants. This funding was to be used towards the build of a new home or substantial renovations, with the intent to help the residential construction market stay afloat during the COVID-19 pandemic. 

Despite the scheme’s expiry, the rate of new home building approvals continue to rise, with an annual record rate of 124,701 new home builds reported over the year thus far. Following this trajectory, these numbers are likely to continue growing, as the economy has seen a strong return since the gradual recovery from COVID-19.. 

In the wake of the pandemic, Australia’s housing market has grown exponentially, performing better than expected by many of Australia’s leading economists. Across the nation, dwelling values soared by a stellar 10.6% according to CoreLogic between May 2020-May 2021. Responsible for this incline are low interest rates, housing incentives and the desire for home improvement, whilst many Australians are working from home, there is more time both to notice and to act on necessary upgrades. 

According to market research, ABS House Building Approvals have continued to grow throughout 2021, not only in Sydney and Melbourne, but across all capitals, with Perth leading the way with an increase of 118% according to research undertaken by MyHousingMarket, however, the number of Perth’s building approvals was 1,902, below Melbourne (at 2,662). The lowest approval rate was recorded in Adelaide (993), followed by Sydney (1,321) and Brisbane (1,393). According to the same research, across February, Sydney reported the highest average building cost approval, with an average of $368,643, followed by Melbourne at $339,268, Brisbane at $305,431, Perth at $274,838 and Adelaide at $260,095. 

The Housing Industry Association has forecasted over 143,700 new builds over 2021, and has estimated that renovations will be popular, hitting all-time highs. In February, the Association predicted that 2021 would see 130,000 new detached homes being built, which is a 20% increase from the 2018 record.