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Housing construction slows; Victoria to fall far short of supply target - featured image

Housing construction slows; Victoria to fall far short of supply target

With another building firm going into administration yesterday, affecting a further 120 projects, it wasn't a great surprise to see that home-building activity was falling sharply in late 2023 as the pipeline shrunk.

New Houses Construction Work Done

Apartment construction held up better.

I've been of the opinion that anti-landlord legislation and new land taxes will stifle the supply of rentals in Victoria.

Usually, I get the smartarse quips about the properties not spontaneously combusting when a landlord sells up.

This is true, but overlooks the important role of household formation, and also that most new units are bought and funded by investors.

Take the investors out of the market and new apartment supply will dry up.

Victoria has a notional target of building 800,000 new homes over the next decade to meet record rental shortages and high population growth.

Good luck, but, well, I can't see it...

Other New Residential Building Attached Dwellings

Attached dwelling construction in Brisbane is beginning to stir again in response to a chronic shortage.

Overall construction activity was strong, driven by another record quarter for engineering and infrastructure activity in New South Wales, and an ongoing ramp-up in mining construction in Western Australia.

Engineering Construction
Overall, December 2023 was a very strong quarter for engineering works, but residential building work done fell by more than 5 per cent as house building slowed, while Victoria's housing supply targets increasingly look like a pipe dream due to taxes and other disincentives.
About Pete is a Chartered Accountant, Chartered Secretary and has a Financial Planning Diploma. Using a long term approach to building businesses, investing in equities, & owning a portfolio he achieved financial independence at the age of 33. Visit his blog
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