The COVID-19 pandemic has created a building boom in Victoria fuelled by the Federal Government's HomeBuilder grant.



According to the Australian Bureau of Statistics, the 2020/21 financial year saw 46,287 detached house commencements in Victoria. This is 17.9 per cent higher than the pre-HomeBuilder annual record of 39,249 set over a decade ago.



In the three months to June 2021, almost 14,200 new houses commenced construction in Victoria. This is 33.3 per cent higher than the pre-HomeBuilder quarterly record set in March 2010, according to the Housing Industry Association.



The largest player in the residential building industry is Metricon, whose year-on-year figures mirror the boom in building activity revealed in the ABS statistics.



In 2020/21 Metricon, which operates in Victoria, Queensland, NSW and South Australia, recorded 6,052 building starts, compared to 4,543 starts in 2019/2020.



Building growth has been particularly strong in Queensland as buyers leave lockdown states like Victoria and NSW.



With its building activity up 33 per cent year on year, Metricon topped the HIA's annual list of the country's biggest home builders ahead of the ABN Group and MJH Group.



Metricon CEO Mario Biasin attributed his company's stellar growth to not only the HomeBuilder scheme, but also low interest rates and an increase in people leaving high-density suburbs seeking more space and larger single dwelling homes.



Director of KR Peters Peter Nicolls agreed saying the pandemic had made people reassess their lifestyle and location.



"After so many lockdowns, particularly here in Victoria, buyers now want larger homes with backyards that offer them space and lifestyle choices. Working from home is here to stay meaning people don't have to live close to work anymore. People want their own castle where they feel safe and can create a comfortable lifestyle for their family and entertain friends at home," Mr Nicolls said.



However, he also cautioned that while the building boom was good for increasing Australia's housing stock, builders were facing major cash flow problems as well as labour and materials supply issues because of the pandemic.



"The delays caused by the lockdowns affectively means that builders are unable to reach the next stage and make a progress claim in a timely manner," Mr Nicolls explained.



"They get stretched and end up carrying the build for longer than expected. It is in these times that they seek their bank's support and experience shows us that banks are not always supportive."



The HIA expects the HomeBuilder-driven peak to remain a record for many years, if not decades, to come.



And while detached dwellings boom, the picture isn't so rosy in the multi-unit market.



Despite multi-unit commencements lifting in the June 2021 quarter, the 2020/21 financial year was still down by 43.4 per cent from the 2017/18 market peak. This is the weakest financial year for multi-unit commencements since 2011/12.



“This sector’s prospects are very much tied to the return of the overseas and interstate migrants, students and tourists that Victoria depends upon more than any other state or territory," said a HIA spokesperson.