Industry Whip-Around Dec 2021

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2021 has thrown opportunity with challenge for our industry; booming demand for housing, Covid-19 lockdowns and restrictions, supply shortages, labour shortages and price increases to name a few. It’s been a big year, that’s for sure!

It looks like demand for housing in 2022 will be much the same as this year.

According to HIA Chief Economist, Tim Reardon, demand for new detached and multi-unit housing has remained strong, suggesting that the current boom in home building will be sustained throughout 2022.

“There has been a clear shift towards lower density housing during the pandemic and this trend does not appear to show signs of slowing. This shift is not just those in units moving to detached housing but includes a shift to fewer people per household. As a result, we have seen a significant change in the volume, type and location of new homes. These trends are similar in other countries,” said Tim.

“Sales since the end of HomeBuilder (April 2021 – October 2021) are the strongest they have been since 2017 when over 115,000 detached homes commenced construction.

This strong level of home building activity suggests that the current boom in residential construction will be sustained throughout 2022. The full impact of the loss of migration is yet to fully impact demand for detached housing and a rise in interest rates will mark the end of this COVID building boom. The industry will continue to run at capacity throughout 2022, constrained by the availability of land, labour and materials. Over the year to September, the price of skilled trades increased by 5.2 per cent, while the price of materials as measured by the ABS increased by 8.0 per cent. The price of residential land increased by 8.5 per cent in the 2020/21 financial year. This has led to an increase in the cost of a new house and land package,” said Tim.

For your information, below is a compilation of news and updates compiled from referenced sources.

Scroll down for HIA Building Approvals Data, October 2021

INDUSTRY NEWS IN REVIEW

 

In the news: Dark roofs to be banned in NSW, planning minister says

The NSW government will move to ban dark roofs as part of its push to deliver more sustainable housing and reach its target of net zero emissions by 2050.

Speaking to the Committee for Sydney, planning minister Rob Stokes foreshadowed the policy switch to ensure all new housing has light-coloured roofing.

He said recent University of NSW research commissioned by the federal government found Sydney’s ambient temperatures could be reduced by up to 2.4C if dark roofing was ditched across the city. A light coloured roof could reduce temperatures inside the home by up to 10 degrees during a heatwave.

Article from 17th November 2021 The Guardian READ MORE

In the news: Victorian building boom slows, but fears for Melbourne CBD left behind

Victoria’s record-setting building boom appears to finally be slowing, with the number of new houses approved for construction falling to its lowest level since August last year.

But it’s only a tapering, with demand still high enough to drive Melbourne’s median land price to an almost $335,000 record across the three months to September, and with enough work in the pipeline already to have builders booked to the second half of 2022.

The boom has been big enough to cause shortages of numerous building supplies, most notably wooden frames. There’s also been a rise in thefts from building sites.

Article from 4th November 2021 Realestate.com.au READ MORE

Report: Building a New Home: Construction Cost Changes

This article investigates the changes in construction cost between the value of approval, the expected value at commencement and the final value at completion of construction for new houses, townhouses and apartments. These values exclude the value of land and landscaping but include site preparation costs associated with building activity.

Key Statistics

  • Almost half of new residential dwellings (44.9% of dwellings) cost more to build than they were approved for, while 22.5% of dwellings cost less.
  • Overall, new residential dwellings cost 1.4% more to build than they were approved for, with an average increase of $3,941 per dwelling.
  • Apartments had the largest changes in the cost of construction, rising by 6.3% between approval and commencement and falling by 8.1% between commencement and completion.
  • Houses had the smallest cost changes, rising by 2.3% from approval to commencement and falling by 0.4% from commencement to completion.

Article from 14th October 2021 Australian Bureau of Statistics READ MORE

In the news: These households are ditching gas, slashing bills and going ‘net zero’. Here’s how

After receiving a $400 gas bill in their first month, they began a process of improving insulation, swapping out gas appliances for electrical ones, and generally making the house “net zero” in terms of energy use, meaning it produces as much energy as it consumes over a period of time.

It looks unassuming from the outside, but this Brunswick East house is “net zero”.

They now have no gas bills and, over the course of a year, export more electricity to the grid than they import.

All up, the transition cost them $12,000.

And within just a few years, they’re likely to make that money back.

Article from October 2021 ABC READ MORE

Report: Surfing the Housing Pipeline (or, measuring the demand-supply gap)

FTMA Housing Report, prepared by Tim Woods, Industry Edge, Sept 2021. Considerations to share: In July, Australia’s total monthly dwelling approvals fell for the fourth successive month, but at 18,651 dwellings, approvals were still up a whopping 19.3% compared with July 2020 and more than 29% higher than in July 2019. – It looks like approvals will peak year ended August at about 225,000 dwellings. -The record for annual approvals was the year-ended August 2016, when they hit 240,624. We will not reach that level this boom. – “we cannot yet forecast future wood demand”

Article from September 2021 Frame and Truss Manufacturing Association of Australia READ MORE

In the news: Queensland shakes off COVID to have the strongest construction market

Queensland continues to have the strongest residential market in the country as the state avoided lengthy lockdowns that occurred along the rest of the east coast.

The HIA Housing Scorecard report presents analysis which ranks each of the eight states and territories based on the performance of 13 key residential building indicators against their decade average covering, detached and multi-unit building activity, renovations, housing finance, and rates of overseas and interstate migration.

“Demand for new detached and multi-unit construction has remained strong even with lockdowns. It appears that the more time people spend in lockdown, the higher demand is for detached housing and renovations activity. As a result, building activity is booming in every market. Queensland has continued to capitalise on these shifting trends and its low COVID infections to have the strongest residential construction market in the country,” added Ms Lillicrap.

Article from December 2021 HIA READ MORE

In the news: Investor activity in housing increases

The value of loans to investors continued to increase in October to reach its highest level since April 2015.

The ABS released the Lending to Households and Businesses data for October 2021 today. The publication presents statistics on housing finance commitments including for the purchase or construction of new dwellings.

“Despite this near record level of investor activity, they accounted for a relatively modest 33 per cent of the total lending in October. This is well below their peak of activity in the market in 2015 when they reached 46 per cent of the value of lending,” added Mr Devitt.

Article from December 2021 HIA READ MORE

In the news: Women on construction sites welcome NSW funding boost to increase numbers

A $57.4 million state government funding boost is aimed at transitioning more workers into construction, and one part will be to put tools in young women’s hands.

The four-year program will partner with 139 high schools to give girls real life experience.

NSW Skills and Tertiary Education Minister, Geoff Lee said the low number of female tradies needed to change.

“It is bloody hard as a single female to be surrounded by a male dominated workforce. Women need support just like other employees and that’s the approach we are targeting,” Mr Lee said.

Article from December 2021 ABC READ MORE

In the news: New incentives for Victorian build-to-rent construction

The Victorian Government will provide new incentives for investors to build rental properties to help ensure more people have safe, secure housing.

Eligible build‑to‑rent developments completed and operational between 1 January 2021 and 31 December 2031 will receive both the 50 per cent land tax discount and full exemption from the Absentee Owner Surcharge (AOS) for up to 30 years from 1 January 2022.

Originally announced to end in 2040, this support will now provide the certainty of a full 30-year concession to projects starting before 2032.

Article from October 2021 Inside Construction READ MORE

 

STATE & REGIONAL HOUSING APPROVALS

Housing Approvals data provided by HIA, October 2021

(scroll down the lists below to find all regions in Victoria and New South Wales)

Dwelling Approvals

Victoria and New South Wales, HIA October 2021

New South Wales Victoria
Date Total Dwelling Single
Detached House
Unit/
Townhouse
Total Dwelling Single
Detached House
Unit/
Townhouse
Nov-20 5331 2414 2917 4958 3646 1312
Dec-20 4532 2537 1995 4546 3403 1143
Jan-21 3627 1702 1925 3550 2723 827
Feb-21 4681 2573 2108 5870 4322 1548
Mar-21 6211 2909 3302 7678 5140 2538
Apr-21 6440 2706 3734 5874 4727 1147
May-21 6436 3106 3330 6077 4502 1575
Jun-21 5410 2858 2552 6813 4393 2420
Jul-21 5452 2754 2698 6098 4105 1993
Aug-21 4837 2925 1912 6691 4431 2260
Sep-21 6240 2547 3693 5659 3626 2033
Oct-21 4632 2460 2172 5481 3767 1714

Vic and NSW – Single Detached Houses Approvals 

Locations State Oct-21 Oct-20 %

Difference

Rolling 12 Months Previous Rolling 12 Months 12 Month Variance
Victoria VIC 3767 3880 -2.91% 48785 39058 24.90%
Greater Melbourne VIC 2684 2491 7.75% 31946 26762 19.37%
Ballarat VIC 157 146 7.53% 1955 1426 37.10%
Baw Baw VIC 52 57 -8.77% 994 620 60.32%
Bendigo VIC 105 135 -22.22% 1616 1271 27.14%
Campaspe VIC 6 12 -50.00% 205 190 7.89%
Geelong VIC 145 210 -30.95% 2537 1872 35.52%
Gippsland – East VIC 43 40 7.50% 553 370 49.46%
Gippsland – South West VIC 73 82 -10.98% 1184 796 48.74%
Grampians VIC 19 26 -26.92% 224 170 31.76%
Latrobe Valley VIC 40 86 -53.49% 555 379 46.44%
Melbourne – Inner East (Boroondara, Manningham, Whitehorse) VIC 56 73 -23.29% 700 656 6.71%
Melbourne – Inner South (Bayside, Glen Eira, Kingston, Stonnington – East) VIC 55 44 25.00% 600 652 -7.98%
Melbourne – Inner suburbs VIC 37 29 27.59% 366 341 7.33%
Melbourne – North East (Banyule, Darebin – North, Kinglake, Whittlesea) VIC 297 304 -2.30% 4157 3333 24.72%
Melbourne – North West (Keilor, Macedon Ranges, Moreland – North, Sunbury, Tullamarine) VIC 467 385 21.30% 4351 4013 8.42%
Melbourne – Outer East (Knox, Manningham, Maroondah, Whitehore – East, Yarra Ranges) VIC 96 101 -4.95% 1157 1050 10.19%
Melbourne – South East (Cardinia, Casey-North, Casey-South, Dandenong, Monash) VIC 542 494 9.72% 6714 5208 28.92%
Melbourne – West (Brimbank, Hobsons Bay, Maribyrnong, Melton – Bacchus Marsh, Wyndham) VIC 1048 965 8.60% 12967 10581 22.55%
Mildura VIC 18 39 -53.85% 373 258 44.57%
Mornington Peninsula – Frankston VIC 86 96 -10.42% 934 928 0.65%
Murray River – Swan Hill VIC 9 16 -43.75% 166 113 46.90%
Shepparton VIC 41 44 -6.82% 608 410 48.29%
Surf Coast – Bellarine Peninsula VIC 150 176 -14.77% 2018 1592 26.76%
Upper Goulburn Valley VIC 37 41 -9.76% 613 383 60.05%
Wangaratta – Benalla VIC 22 31 -29.03% 356 270 31.85%
Warrnambool VIC 19 27 -29.63% 402 330 21.82%
Wellington VIC 18 30 -40.00% 390 233 67.38%
Wodonga – Alpine VIC 45 73 -38.36% 787 591 33.16%
New South Wales NSW 2460 2412 1.99% 31491 25160 25.16%
Greater Sydney NSW 1348 1401 -3.78% 18135 15103 20.08%
Albury NSW 47 44 6.82% 653 435 50.11%
Bathurst NSW 18 28 -35.71% 332 226 46.90%
Central Coast NSW 91 87 4.60% 1064 763 39.45%
Coffs Harbour NSW 28 36 -22.22% 390 265 47.17%
Dapto – Port Kembla NSW 23 37 -37.84% 401 339 18.29%
Dubbo NSW 15 21 -28.57% 389 229 69.87%
Gosford NSW 27 22 22.73% 347 289 20.07%
Goulburn NSW 29 13 123.08% 358 159 125.16%
Griffith NSW 25 10 150.00% 175 90 94.44%
Kiama – Shellharbour NSW 34 66 -48.48% 528 450 17.33%
Lake Macquarie NSW 97 98 -1.02% 1070 878 21.87%
Lower Hunter NSW 63 50 26.00% 908 670 35.52%
Maitland NSW 103 59 74.58% 825 910 -9.34%
Newcastle NSW 8 36 -77.78% 302 330 -8.48%
Orange NSW 28 15 86.67% 276 253 9.09%
Port Macquarie NSW 36 20 80.00% 491 363 35.26%
Port Stephens NSW 24 23 4.35% 308 180 71.11%
Rest of NSW NSW 1112 1011 9.99% 13356 10057 32.80%
Richmond – Tweed NSW 70 73 -4.11% 1052 762 38.06%
Shoalhaven NSW 68 53 28.30% 677 495 36.77%
South Coast – Batemas Bay, Bega, Merimbula NSW 29 39 -25.64% 420 370 13.51%
Southern Highlands NSW 26 25 4.00% 219 226 -3.10%
Sutherland NSW 23 21 9.52% 346 209 65.55%
Sydney – Baulkham Hills and Hawkesbury NSW 104 189 -44.97% 2226 1747 27.42%
Sydney – Blacktown NSW 245 280 -12.50% 3554 2964 19.91%
Sydney – City and Inner South NSW 10 16 -37.50% 103 91 13.19%
Sydney – Eastern Suburbs (Bondi, Coogee, Randwick) NSW 7 11 -36.36% 132 137 -3.65%
Sydney – Inner South West (Bankstown, Cantebury, Hurtsville) NSW 69 82 -15.85% 1000 998 0.20%
Sydney – Inner West (Canada Bay, Leichhardt, Strathfield) NSW 25 19 31.58% 296 245 20.82%
Sydney – North Sydney (Chatswood, Hornsby, Mosman) NSW 40 37 8.11% 521 463 12.53%
Sydney – Northern Beaches (Manly, Pittwater, Warringah) NSW 39 26 50.00% 478 360 32.78%
Sydney – Outer South West (Camden, Campbelltown, Wollondilly) NSW 102 187 -45.45% 1791 2030 -11.77%
Sydney – Parramatta NSW 83 57 45.61% 854 720 18.61%
Sydney – Penrith, Richmond, Blue Mountains NSW 81 98 -17.35% 1073 1027 4.48%
Sydney – Ryde NSW 42 24 75.00% 363 248 46.37%
Sydney – South West (Bringelly, Fairfield, Liverpool) NSW 387 267 44.94% 4334 3101 39.76%
Tamworth NSW 20 35 -42.86% 331 184 79.89%
Taree – Gloucester NSW 29 13 123.08% 361 218 65.60%
Wagga Wagga NSW 50 51 -1.96% 578 407 42.01%
Wollongong NSW 25 20 25.00% 258 227 13.66%
Wyong NSW 64 65 -1.54% 717 474 51.27%
Australian Capital Territory ACT 156 83 87.95% 1657 1181 40.30%

Vic and NSW – Units and Apartment Approvals 

Locations State Oct-21 Oct-20 % Difference Month Rolling 12 Months Previous Rolling 12 Months 12 Month Variance
Victoria VIC 1714 1534 11.73% 20510 24854 -17.48%
Greater Melbourne VIC 1642 1459 12.54% 18908 23910 -20.92%
Ballarat VIC 4 5 -20.00% 179 108 65.74%
Baw Baw VIC 6 0 Inf 76 20 280.00%
Bendigo VIC 4 3 33.33% 67 60 11.67%
Campaspe VIC 0 2 -100.00% 11 7 57.14%
Geelong VIC 39 20 95.00% 556 324 71.60%
Gippsland – East VIC 0 0 NA 10 0 Inf
Gippsland – South West VIC 0 0 NA 42 17 147.06%
Grampians VIC 2 0 Inf 33 6 450.00%
Latrobe Valley VIC 2 0 Inf 26 48 -45.83%
Melbourne – Inner East (Boroondara, Manningham, Whitehorse) VIC 182 57 219.30% 2459 2613 -5.89%
Melbourne – Inner South (Bayside, Glen Eira, Kingston, Stonnington – East) VIC 168 545 -69.17% 2743 2407 13.96%
Melbourne – Inner suburbs VIC 409 333 22.82% 3795 9628 -60.58%
Melbourne – North East (Banyule, Darebin – North, Kinglake, Whittlesea) VIC 266 164 62.20% 1917 1879 2.02%
Melbourne – North West (Keilor, Macedon Ranges, Moreland – North, Sunbury, Tullamarine) VIC 169 63 168.25% 1132 1128 0.35%
Melbourne – Outer East (Knox, Manningham, Maroondah, Whitehore – East, Yarra Ranges) VIC 116 106 9.43% 1292 1328 -2.71%
Melbourne – South East (Cardinia, Casey-North, Casey-South, Dandenong, Monash) VIC 161 67 140.30% 1948 2105 -7.46%
Melbourne – West (Brimbank, Hobsons Bay, Maribyrnong, Melton – Bacchus Marsh, Wyndham) VIC 118 98 20.41% 3013 2300 31.00%
Mildura VIC 4 2 100.00% 20 22 -9.09%
Mornington Peninsula – Frankston VIC 53 26 103.85% 609 522 16.67%
Murray River – Swan Hill VIC 2 0 Inf 21 6 250.00%
Shepparton VIC 0 1 -100.00% 38 16 137.50%
Surf Coast – Bellarine Peninsula VIC 6 36 -83.33% 191 222 -13.96%
Upper Goulburn Valley VIC 0 2 -100.00% 32 28 14.29%
Wangaratta – Benalla VIC 0 2 -100.00% 64 16 300.00%
Warrnambool VIC 0 0 NA 94 6 1466.67%
Wellington VIC 0 0 NA 26 4 550.00%
Wodonga – Alpine VIC 3 0 Inf 25 4 525.00%
New South Wales NSW 2172 2707 -19.76% 32338 24152 33.89%
Greater Sydney NSW 1665 2319 -28.20% 26490 20011 32.38%
Albury NSW 5 0 Inf 43 48 -10.42%
Bathurst NSW 4 2 100.00% 36 74 -51.35%
Central Coast NSW 72 20 260.00% 559 421 32.78%
Coffs Harbour NSW 45 29 55.17% 201 87 131.03%
Dapto – Port Kembla NSW 126 6 2000.00% 247 264 -6.44%
Dubbo NSW 14 4 250.00% 87 63 38.10%
Gosford NSW 45 7 542.86% 356 222 60.36%
Goulburn NSW 14 20 -30.00% 68 70 -2.86%
Griffith NSW 4 4 0.00% 30 16 87.50%
Kiama – Shellharbour NSW 42 30 40.00% 785 361 117.45%
Lake Macquarie NSW 88 55 60.00% 469 308 52.27%
Lower Hunter NSW 8 2 300.00% 135 46 193.48%
Maitland NSW 8 46 -82.61% 364 397 -8.31%
Newcastle NSW 14 68 -79.41% 810 568 42.61%
Orange NSW 11 4 175.00% 70 37 89.19%
Port Macquarie NSW 20 41 -51.22% 230 186 23.66%
Port Stephens NSW 4 0 Inf 291 72 304.17%
Rest of NSW NSW 507 388 30.67% 5848 4141 41.22%
Richmond – Tweed NSW 31 6 416.67% 369 301 22.59%
Shoalhaven NSW 2 37 -94.59% 204 296 -31.08%
South Coast – Batemas Bay, Bega, Merimbula NSW 0 8 -100.00% 45 104 -56.73%
Southern Highlands NSW 0 0 NA 234 31 654.84%
Sutherland NSW 47 79 -40.51% 1134 776 46.13%
Sydney – Baulkham Hills and Hawkesbury NSW 163 387 -57.88% 1632 882 85.03%
Sydney – Blacktown NSW 356 528 -32.58% 4586 2116 116.73%
Sydney – City and Inner South NSW 50 331 -84.89% 3360 1626 106.64%
Sydney – Eastern Suburbs (Bondi, Coogee, Randwick) NSW 111 66 68.18% 551 461 19.52%
Sydney – Inner South West (Bankstown, Cantebury, Hurtsville) NSW 130 178 -26.97% 2117 3070 -31.04%
Sydney – Inner West (Canada Bay, Leichhardt, Strathfield) NSW 24 23 4.35% 1088 1340 -18.81%
Sydney – North Sydney (Chatswood, Hornsby, Mosman) NSW 57 124 -54.03% 746 1103 -32.37%
Sydney – Northern Beaches (Manly, Pittwater, Warringah) NSW 3 74 -95.95% 424 274 54.74%
Sydney – Outer South West (Camden, Campbelltown, Wollondilly) NSW 32 12 166.67% 894 794 12.59%
Sydney – Parramatta NSW 216 30 620.00% 5475 4178 31.04%
Sydney – Penrith, Richmond, Blue Mountains NSW 37 23 60.87% 589 640 -7.97%
Sydney – Ryde NSW 262 58 351.72% 2357 597 294.81%
Sydney – South West (Bringelly, Fairfield, Liverpool) NSW 105 386 -72.80% 978 1733 -43.57%
Tamworth NSW 18 0 Inf 65 65 0.00%
Taree – Gloucester NSW 4 0 Inf 51 64 -20.31%
Wagga Wagga NSW 5 4 25.00% 76 49 55.10%
Wollongong NSW 6 20 -70.00% 487 443 9.93%
Wyong NSW 27 13 107.69% 203 199 2.01%
Australian Capital Territory ACT 220 334 -34.13% 3482 3689 -5.61%