• The value of new residential construction grew 5.1% to $18.9 billion in the March quarter, the Australian Bureau Of Statistics says.
• Expenditure on residential construction was 4.2% higher than the prior corresponding period, as homebuilders flocked into the market.
• Spending on non-residential construction lagged by comparison, falling 1.6% over the quarter.
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The value of new residential construction spiked 5.1% over the March quarter, the Australian Bureau of Statistics (ABS) reports, outlining the sheer demand for new homes in a hyped-up and incentivised market.

In a preliminary report, released Wednesday, the ABS says the residential construction industry generated $18.9 billion in spending over the quarter, up 4.2% from the levels recorded over the same period last year.

That splurge on new home construction drove Australia’s total spending on building work up 2.5%, despite expenditure on non-residential construction declining by 1.6% over the quarter — and 10.4% compared to the same point last year.

All told, the total value of all construction in the March quarter was 1.1% lower than last year.

The massive influx of cash into the residential construction industry came at the tail-end of the Federal Government’s $2 billion HomeBuilder scheme, which initially plied eligible Australians with $25,000 to construct a new house or conduct significant renovations on an existing home.

The impact of that measure, and rock-bottom interest rates, is clear to see.

Although the value of new loan commitments from first home buyers fell in March as HomeBuilder’s eligiblity window drew to a close, it still stood at $6.8 billion, or 61.4% higher than a year prior.

And the surge in private sector housing approvals — the raw material behind the construction spending blitz — remained at blistering levels in March, when 14,117 houses were given the green light.

That figure stands 60.9% higher than the number of new private residency construction approvals in March 2020, when the nation was coming to terms with pandemic lockdowns and business restrictions.

Discussing elevated approval figures in recent months, My Housing Market chief economist Andrew Wilson said boosted expenditure on new housing is beneficial for Australia’s economic recovery from the pandemic.

The recent unprecedented increase in house building approvals is “clearly a positive for a post-COVID economic revival, contributing to continued strong jobs growth and placing downward pressure on unemployment,” Wilson said.

And supply constraints, caused by elevated demand, could drive house prices even higher.

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