Apartments overtaking new house starts

A surge in new units at the end of last year led to apartments overtaking house completions for the first time.

A 26 per cent surge in new units in the past three months of last year led to apartments overtaking house completions for the first time on record.

The number of new apartments built between September and December was 28,527, compared with 28,102 new houses, according to data from the ABS and CoreLogic.

CoreLogic research analyst Cameron Kusher said unit completions would remain high, given the unprecedented numbers still under construction, but Australian cities remained “a long way” from apartments overtaking homes.

“There is a lot of unit construction in Sydney, Melbourne and Brisbane but for a long time we’re going to see houses continue as the dominant type of dwelling construction,” he said.

“I think for Sydney there will be push to that (more units) because the price of a detached house is so high. If people want to get in the market, units are really their only option.”

By the end of the quarter there were 152,635 units underway, compared with 64,332 houses.

Mr Kusher said there was an ongoing strength in the Sydney market but noted a drop in starts in Victoria and Queensland.

Housing Industry Association economist Geordan Murray said new dwelling starts had hit a record in the March quarter last year, before falling off mid-year, then recovering 0.3 per cent in the last quarter.

Overall, Victorian residential construction continued to power ahead with a jump in dwelling starts of 7.6 per cent in the last quarter. It joined South Australia’s 2.8 per cent rise as the only state to record a boost in quarterly housing start numbers for the December quarter. The ACT recorded its strongest quarter on record, with 2222 starts. In the Northern Territory houses led the industry to one of its strongest quarterly results.

In NSW starts fell 0.2 per cent, Tasmania 5.3 per cent and Western Australia 8 per cent. In Queensland there was a 19.3 per cent drop in new dwelling starts for the quarter, dominated by the sharp fall in apartment building.