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Renovation Work Props Up Home Building

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Home renovations and public sector work are boosting the construction industry as buyers and home owners take advantage of the HomeBuilder stimulus.

The value of work dropped in the September quarter by 2.6 per cent with building work dropping 2 per cent and engineering work down 3.3 per cent according to the Australian Bureau of Statistics.

Compared to the same time last year building work is 7.2 per cent lower while engineering is 0.1 per cent higher.

However this could be the industry bottoming out according to economists, with lending indicators, the construction index and public spending on the rise.

Lending shows home owners and buyers were scrambling to get finance and take advantage of the HomeBuilder stimulus before the end of the year.

Value of construction work: ABS

ValueJune 20 to Sep 20Sept 19 to Sept 20
NSW $15.54bn-1.7%-8.1%
Vic$14.03bn-5.7%-3.8%
Qld$9.73bn-2.2%-3.9%
SA$3.00bn-0.6%-2.7%
WA$6.74bn-1.6%5.8%
Tas$719m-4.8%-17.5%
NT$520m3.9%2.6%
ACT$894m-8.7%-5.0%

^Source: Australian Bureau of Statistics, seasonally adjusted estimates

Commsec senior economist Ryan Felsman said while the sector dealing with the shock of the pandemic their figures show another story.

“The value of home renovations construction work rose by 5.1 per cent in the September quarter—the most in 2.5 years—with Aussies taking the opportunity to upgrade their homes during the pandemic,” Felsman said.

“And public construction work done lifted by 3.2 per cent in the quarter as governments accelerated shovel ready projects, driven by non-residential (up 3 per cent) and residential (up 16.2 per cent) construction.”

ANZ senior economist Catherine Birch said the fall for residential work was ultimately smaller than expected.

“Nationally, there was a marked contrast between the private and public sectors, with a 4.4 per cent quarter on quarter drop in private work done partially offset by a 3.2 per cent rise in public work done.”

“Public sector housing activity has picked up by more than a quarter since the first quarter, albeit following a two-year period of decline.”

Residential and non-residential building: ABS

Value of building work, September quarter, Australian Bureau of Statistics

^Source: Australian Bureau of Statistics, seasonally adjusted estimates

HIA economist Angela Lillicrap said multi-unit dwelling work is still down but the housing market is about to pick up.

“The announcement of HomeBuilder was the catalyst for a surge in demand for new detached homes, but there are numerous other factors at play,” Lillicrap said.

“These include low interest rates and improving confidence in the market.

“With the outlook for a strong new home building market and a strong renovations market, employment within the sector will grow into the new year.”

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Article originally posted at: https://theurbandeveloper.com/articles/construction-stats-show-september-scramble