The positive impact of the HomeBuilder scheme, other incentives stamp duty reductions, and low interest rates, is driving a boom in Australia’s detached house building segment. The boost has been particularly marked in regional areas. Multi-unit residential, however, has not benefitted greatly from this, with a downturn continuing in this segment.
The critical time for house building will be once the positive boost from HomeBuilder starts to diminish. Then, the second of the current major factors – lower migration – will play a key role in determining how far activity falls.
At this stage, it appears that overseas migration will be quite slow to rebuild, hopefully returning to relatively normal levels by late-2023. The implication of this is that there will be a sizeable gap in demand over the next two years. While building activity in the first half of FY2022 is likely to still be benefitting from the current surge in HomeBuilder grants and approvals, the latter part of FY2022, and all of FY2023 are shaping up as a lean 18 months, with a large decline in housing starts expected.