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Government support continues home builders in Queensland

Support from governments will help keep the market attractive for first-home builders in Queensland, says Robert Sobyra.

Construction Skills Queensland director Robert Sobyra

Queensland’s housing boom is peaking but the bubble isn’t about to burst, says Construction Skills Queensland (CSQ) director research and digital Robert Sobyra.

Data from the Australian Bureau of Statistics (ABS) and CSQ indicate construction-related lending rose throughout the COVID-19 pandemic to peak at about $1.3 billion around October 2020, before falling again to steady at about $900 million in August.

The value of house construction in Queensland remained stable from December 2011 through to March 2020, at around the $1.5 billion mark, with the exception being a spike to $2 billion in 2017. But the production pipeline surged higher once the pandemic hit Australian shores in March 2020 – reaching a value of $2.6 billion by the end of 2020.

Recent ABS figures show the number of new dwellings where construction has started rose from 46,080 in March 2020 to 64,596 in June 2021 – 63 per cent of which were new houses while the remainder were other residential dwellings such as units and apartments.

Yet, like construction-related lending, the pipeline is on the decline, with CSQ predicting house building will plateau until the middle of 2022 before dropping through to March 2023.

Sobyra says much of the rise was due to cheap mortgage rates and the assistance of the government’s HomeBuilder support package.

“Some people think this house building boom has all been about HomeBuilder. It has been a big part of it, but it hasn’t been the only part of it,” he says.

“A bigger component of it has been the cheap mortgage rates and all of the support from the government, which are largely still in place.”

Prior to the pandemic, the home building pipeline, which relates specifically to new house buildings, renovations, and the purchasing of new land for future construction, was relatively steady.

“We are now at the peak of the pipeline for this housing boom,” says Sobyra.

“A lot of the action has been to do with new housing building and not just the turning over of existing stock.

“Policies are being announced by other state governments, which are really continuing to fan the flame of home building and particularly first home buyers. If we keep seeing the support from governments, we will keep seeing new homes being built even as HomeBuilder ends.”

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