Pipeline of units under construction reaches a record-high

A surge in building construction activity is delivering multiple benefits to Australia’s economy, especially around construction industry employment. 4408271_l

New building activity data released by the Australian Bureau of Statistics (ABS) last week shows that to the March 2016 quarter, a record number of unit projects are now underway.

The ABS data shows that 25,122 houses and 29,987 units commenced construction nationally over the quarter.

For the second consecutive quarter, houses construction eased while at the same time, unit commencements increased to a new recordhigh.

House commencements increased over the quarter in SA, Tas and NT but fell elsewhere.

For units, commencements were at record highs in NSW and Qld and also rose in SA and the ACT over the March 2016 quarter.


Looking at dwelling completions, both house and unit completions were lower over the quarter with unit completions falling for the second successive quarter. 


Over the March 2016 quarter, there were 23,218 houses and 15,002 units completed.

Completions for houses fell across each state and territory over the quarter while for units; these were lower over the quarter in all states and territories except for NSW and SA.

Although completions have fallen, there is a record-high number of dwellings currently under construction which is being fuelled by units, which typically, take longer to build than houses.

At the end of the March 2016 quarter, there were 215,863 dwellings under construction nationally, 63,414 of which were houses and 152,449 which were units.

Year-on-year the number of dwellings under construction has increased by 18.6% with the number of houses under construction -5.4% lower while units under construction are 32.6% higher.


We’ve seen the number of houses under construction now well below previous peaks in all states and territories with the amount under construction lower over the quarter in Qld, WA,29167877 - tape line, calculator, pencil and project apartment Tas and ACT but higher elsewhere.

For units, there are currently record-high numbers of units under construction in NSW, Vic and Qld which reiterates the magnitude of the current unit construction boom.

In all states and territories except WA, Tas and NT the number of units under construction has increased over the quarter. 

While the number of dwellings under construction is at record highs, the ABS data and CoreLogic observations show that an elevated number of houses and units have been approved for construction, but not yet commenced.

At the end of March 2016 there were 8,817 houses and 24,175 units which had been approved for construction but not yet commenced.


With completed and under construction supply ramping up sharply over recent years it is reasonable to expect that fewer recently approved dwellings will actually commence in the short-term.

Particularly when you consider that high-rise unit construction is at record-high levels and the considerable level of risk in constructing such a large project.

The record-high number of dwellings under construction and the continuing strong pipeline of approvals should ensure that there is plenty of work for the construction industry over the coming years.


There are though concerns of ‘over-building’ in some areas, especially considering in certain locations much of the new unit supply is targeted at investors rather than the owner occupier market.

Given the challenges in securing enough pre sales to trigger the commencement of some projects, over the coming quarters, we’re expecting that some projects will not begin construction.


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Cameron Kusher is Corelogic RP Data’s senior research analyst. Cameron has a thorough understanding of the fundamentals such as demographics, trends & economics. Visit www.corelogic.com.au

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