Residential Construction Hits a 7 Year Low

Home-building has fallen to the lowest level in more than seven years as the industry suffers from record insolvencies, rising costs, and delays from material and labor shortages.

Official figures showed on Wednesday that the value of residential construction over the four quarters to March fell to $72.6 billion, the lowest total since the June quarter of 2015 when it was $70.8 billion.

Capacity constraints are continuing to hamper activity levels, pointing to the elevated backlog of work that has developed over the past two years, which is expected to support construction activity over the back half of 2023.

The figures indicate a decline in detached house-building activity, with the value of work done over the four quarters down 12.2 percent from the previous year.

The sector is already suffering from a slump in the construction of new attached homes such as apartments, townhouses, and semi-detached homes. Housing starts of attached dwellings had fallen by nearly two-thirds in the December quarter to 12,518, from the last peak of 33,316 in the March 2016 quarter.

Detached house-building, despite fluctuations, had held largely steady with a number over 28,000.

The renovations boom is also winding down, with the value of additions and alterations over the most recent 12-month period falling 6.7 percent to $10.7 billion.