A downturn in dwelling commencements began in earnest in the December quarter of 2018 (in approvals terms, the downturn began a quarter earlier, in September). Nationally, the December quarter 2018 commencements were 16% lower than the corresponding period a year earlier. The latest approvals data reached a four-and-half year low over the year to March 2019, indicating that further falls in commencements are expected. Looking ahead, we forecast falling commencements in Australia in 2018/19, 2019/20 and 2020/21, prior to an upturn in 2021/22.
This national picture reflects a variety of cyclical patterns across the states. Residential building in Western Australia peaked in calendar 2014, at the tale–end of the mining boom, and has been declining ever since. Queensland peaked in 2016, then experienced declines, partly related to its own resources sector slump, but had a brief improvement in the first three quarters of 2018. Victoria and New South Wales were at or near their peaks in mid-2018, prior to the start of rapid declines in the latter part of 2018. The greater size of the New South Wales and Victoria markets means that the national picture more closely reflects the cycles in those states.