Victorian building boom sets new record for financial year starts

roofer worker builder working on roof structure at construction site

Victoria recorded a record number of new home starts in the past financial year.

Victoria’s construction boom has soared to unprecedented levels, with new figures showing the start of construction on 46,287 homes last fiscal year.

Data released this week by the Australian Bureau of Statistics includes 14,200 single-family homes that builders started in the three months to June, a quarterly record.

The remarkable number equates to one-third of all homes under construction around Australia.

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The previous record for a fiscal year was broken with 39,249 domestic starts over a decade ago, a three-month record since 10,653 notches in March 2010 following government incentives to support the market in the wake of the global financial crisis.

However, the increase precedes the construction sector’s two-week closure at the end of September.

Fiona Nield, executive director of the Housing Industry Association Victorian, said the notable boom was spurred by the federal government’s HomeBuilder plan, which offers eligible home buyers $15,000 to $25,000 in grants to build a new home.

However, sales have remained strong since the program ended earlier this year, and building approvals for new homes have continued at near-record levels in recent months.

CM New Estates - general image - House under construction

Housing construction has been a major force in the Victorian economy during the pandemic.

“HomeBuilder appears to be particularly effective at this stage – of course we would like to see the trend continue,” said Ms. Nield.

“And some people may have saved some money during Covid-19 and are potentially considering buying a new home.”

But it’s the next data release from ABS that has caught the industry’s attention, as Victoria will capture most of the fortnightly construction sector shutdown from Sep 20 to Oct 4.

Ms Nield said that despite the building ban, which ended a week ago, there was only a “measured return” to home construction.

The limit of three plants a week in most trades, as well as an ongoing barrier to entry for regional workers into Melbourne, meant business was going “at a slow pace”.

Construction workers collaborating while analyzing housing project in apartment.

Builders were able to return to work with limited capacity.

“But hopefully in the near future we will be in a position to see some easing in this regard,” said Ms. Nield.

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