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8731.0 - Building Approvals, Australia, Jul 2008 Quality Declaration 
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 02/09/2008   
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FEATURE ARTICLE: AVERAGE QUARTERLY COMPLETION TIMES FOR NEW HOUSES


INTRODUCTION

This article presents quarterly estimates of the average time taken to build new houses in Australia, for houses completed between January 1987 and March 2008. Broad comparisons between states in five year spans over the period from January 1988 to December 2007 are also discussed.

The data presented were compiled from the Australian Bureau of Statistics (ABS) quarterly Building Activity Survey, analysing the commencement and completion quarters for new houses (defined as fully detached dwellings being built from scratch). Houses taking more than three years to complete, being in the most extreme 1% by value or being constructed in groups of 10 or more were excluded. This excluded approximately 2.5% of completed houses.


Results

Australia by completion quarter

Graph 1 shows the average number of quarters to complete a new house, by completion quarter, from the first quarter of 1987 to the end of the first quarter 2008. The data show that the average construction times fell from a peak of 2.1 quarters in the first quarter of 1990 and remained between 1.6-1.8 quarters from the middle of 1992 to the end of the 1990s. A large disturbance in construction times coinciding with the introduction of the GST is evident in the data from the second quarter of 2000 through 2001. Following the correction in 2001, construction times have climbed above the peak of early 1990 with a general upward trend evident towards the end of the series. The average completion time at the end of the series has risen to around 2.4 quarters and may be levelling.

Graph 1. Average Number of Quarters to Complete New Houses, Australia
Graph: Graph 1. Average Number of Quarters to Complete New Houses, Australia


States and Territories by Five Year Time Spans

Graph 2 shows the five year average construction time to the end of the stated year for new houses in Australia and each state and territory (states). The use of five year spans allows a concise comparison between states. At a national level, the first span contains the tail of the 1980s and the fall at the start of the 1990s (to December 1992) and the last contains the consistent rise from January 2003 to December 2007.

Considering the levels of the graphs for each state, it is evident that Queensland has consistently had the shortest average completion times for new houses and this continued to be the case in the latest five year period. For most of the period considered, Tasmania had the longest average completion times. Western Australia has also seen the largest increase in average construction times in the latest five year period.

Comparing the shapes of the state graphs (graph 2) suggests that there are groups of states with similar changes in construction times over the 20 year period. Most states are characterised by relatively long completion times in the 1988-1992 period, followed by a fall in the next two periods and increasing again in 2003-2007, with longer completion times in the larger states than prior to the fall. Queensland, South Australia and Western Australia form a second group, showing comparatively modest falls in average completion times following the 1988-1992 period but pronounced rises in 2003-2007. This is particularly noticeable in Western Australia.

Graph 2. Average Number of Quarters to Complete New Houses, States, Territories and Australia
Graph: Graph 2. Average Number of Quarters to Complete New Houses, States, Territories and Australia


For more information on this article, please contact David Signorelli on Adelaide (08) 8237 7308.


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