Canberra's apartment construction slowing: HIA Outlook

Canberra’s apartment boom is starting to slow, according to a new report released by the Housing Industry of Australia on Wednesday.

HIA executive director ACT and Southern NSW Greg Weller said the record volume of new apartments commencing construction slowed in the first six months of 2018 and he expected this would continue over the next couple of years.

“As the record volume of apartments under construction reaches completion over the next couple of years, we expect a pause in the commencement of further new apartments until the latest additional stock clears the market,” he said.

Mr Weller said the ACT had the greatest share of multi-unit dwelling commencements compared to any other Australian jurisdiction, with around 3763 starts in the 2017-18 financial year.

“Multi-unit dwellings accounted for 76 per cent of all new dwellings that commenced construction in the ACT during 2017-18,” he said.

Canberra’s apartment boom over the past 10 years has been the biggest since records began.

Despite a record number of apartments, Canberra’s rental unit supply recorded a year-on-year fall of 32 per cent in July.

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Latest ABS figures also show Canberra’s population is growing at a rate of 2.2 per cent, which equates to 24 people per day.

“Recent data shows that the population of the ACT has grown at a much stronger rate than previously estimated, which has driven demand for new housing,” said Mr Weller.

In the housing market, the number of approvals for detached houses was up 13 per cent in the 2017-18 financial year.

While the final figures for the June quarter are yet to be released, the report estimates there were 1164 detached house starts over the year.

Despite the rise, the report states this comes off a long-term trend decline and is below the decade average.

“Detached home building remains weak but we expect that this situation will turn around alongside the strengthening local economic conditions,” added Mr Weller.