“New ABS figures for March 2020 indicate that the recovery in new home building has been brought to a premature end by the Covid-19 crisis,” Master Builders Australia Chief Economist Shane Garrett said.
“The new set of data indicate that approvals for the building of new homes dropped by 4.0% during March compared with February. The reduction was particularly pronounced on the high-density side of the market, with apartment/unit approvals sinking by 8.0% during the month,” he said.
“The second half of March was the time when Covid-19 began to affect everyday life in a profound way. Residential building activity is hugely dependant on consumer confidence and the near-evaporation of this can be seen in the latest results,” Shane Garreet said.
“In the absence of targeted government stimulus, it is likely that new home building starts are likely to continue falling fast and we forecast that they will bottom out at about 116,000 during 2020/21. This would make next financial year one of the weakest on record for new home building,” he said.
“Master Builders Australia recently unveiled a suite of policy proposals to stimulate residential building activity including a $40,000 grant for new home buyers, a Resilience Building Program and measures to reduce the cost of delivering new housing stock,” Shane Garrett said.
“As the economy’s largest source of full-time jobs and small business activity, construction will be a central plank of the economic recovery post-Covid-19. Governments need to get the ball rolling on this immediately,” Shane Garrett said.