Residential construction falls to near-five year low

author-avatar By
on May 27, 2020
Residential construction falls to near-five year low

Photo by João Silas on Unsplash

New research today revealed residential construction completed in March 2020 fell to its lowest level since September 2015.

According to the Australian Bureau of Statistics (ABS), the value of private residential construction work completed was $15.36 billion, and represents the lowest value of residential works completed since the September 2015 quarter, when it was $14.86 billion.

Just under $50 billion worth of construction overall was completed in the March 2020 quarter, a 6.5% slump compared to March 2019 in seasonally adjusted terms.

There has also been six continuous quarterly contractions in the volume of building work done.

The news comes after Prime Minister Scott Morrison yesterday outlined the Government's new 'JobMaker' program, which aims to slash red tape and boost funding for trades and skilled labour.

"It's an issue that has been a key topic of discussion amongst the premiers and chief ministers and myself," Mr Morrison said yesterday.

"If you've got a job in the residential construction industry, Michael Sukkar's [Minister for Housing] here, and Josh [Frydenberg] has been working on plans here."

Buying an investment property or looking to refinance? The table below features home loans with some of the lowest variable interest rates on the market for investors.

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of . View disclaimer.

Industry points to more stimulus as construction falters

Ordinarily, reductions in the Reserve Bank cash rate and wage growth have stimulated the construction industry.

However, the cash rate has found a floor at 0.25% and is set to stay that way for a while, and wage growth has been sluggish.

Last week, the Master Builders Association called for a $40,000 new home building grant, while the Property Council of Australia proposed a $50,000 grant to 50,000 purchasers of new homes.

More broadly, Commonwealth Bank has tipped house prices to fall by a third in a worst-case scenario.

Housing Industry Association chief economist Tim Reardon said construction figures will decline further as data is released for the June quarter.

“The residential building industry had already experienced a significant downturn before COVID-19 struck," he said.

"Leading indicators of home building deteriorated markedly in April and May which paves the way for activity to fall further as the year progresses

“Today’s data confirms that the decline in home building will detract from GDP growth in the March quarter of this year.

"The drag from falling home building activity will become more significant in the June quarter."

Westpac senior economist Andrew Hanlan also said as immigration and population growth slows, so too does the construction industry.

"New home building activity fell further, as anticipated – with the outlook for further declines in part due to the pandemic and the near-term hit to population growth," he said.

"The decline in overall construction work early in 2020 continues the downward trend since mid-2018, coinciding with the peak in home building activity."

The Government is expecting a 30% fall in net overseas migration this financial year, while next financial year it's tipped to fall by 85%.

Yesterday, Mr Morrison said Australia needs to welcome between 160,000 and 210,000 migrants per year to maintain its GDP-per-capita growth, indicating a technical recession is likely.


The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site.,,, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

Latest Articles

Harrison is's Assistant Editor. Prior to joining Savings in January 2020, he worked for some of Australia's largest comparison sites and media organisations. With a keen interest in the economy, housing policy, and personal finance, Harrison strives to deliver and edit news and guides that are engaging, thought-provoking, and simple to read.


Be Savings smart.
Subscribe for free money newsletters.

By subscribing you agree
to the Savings Privacy Policy