The Australian residential building sector has been in a sharp downturn since the latter part of 2018. Dwelling commencements declined in each of the four quarters to September quarter 2019, compared to the corresponding periods a year earlier. Nationally, dwelling commencements were 22% lower over the year to September 2019. The latest approvals data reached a six-year low, indicating that further falls in commencements are expected. Looking ahead, we forecast falling commencements in Australia in 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 tail-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.