Time for a fed­eral fo­cus on hous­ing sup­ply

Australasian Timber - - HOUSING -

“THE NA­TIONAL new home build­ing sec­tor has made an out­stand­ing con­tri­bu­tion to over­all eco­nomic ac­tiv­ity in Aus­tralia over the last four years, as the lat­est Hous­ing In­dus­try As­so­ci­a­tion Na­tional Out­look*- re­leased 16 March - clearly demon­strates,” said HIA Chief Econ­o­mist, Dr Har­ley Dale. “With­out this con­tri­bu­tion from res­i­den­tial con­struc­tion the do­mes­tic econ­omy would have been con­sid­er­ably weaker than has turned out to be the case over re­cent years.”

“Look­ing be­yond the cur­rent cy­cle, a strong fo­cus on hous­ing sup­ply and pol­icy re­form is cru­cial to Aus­tralia’s fu­ture eco­nomic and so­cial pros­per­ity as we look to suc­cess­fully house a grow­ing and age­ing pop­u­la­tion, along the way re­duc­ing pres­sures on the na­tion’s bur­geon­ing health bud­get,” said Har­ley Dale.

“Aus­tralia will fail to achieve this ob­jec­tive with­out fed­eral gov­ern­ment lead­er­ship and in­volve­ment in hous­ing pol­icy re­form, in­clud­ing strate­gic plan­ning for the fu­ture hous­ing and res­i­den­tial in­fra­struc­ture re­quire­ments of our grow­ing and age­ing pop­u­la­tion.”

“Tinker­ing with neg­a­tive gear­ing and cap­i­tal gains tax pro­vi­sions doesn’t rep­re­sent real re­form, but risks dam­ag­ing con­fi­dence to­wards the hous­ing in­dus­try at a cru­cial junc­ture in the cy­cle. A key find­ing in the lat­est HIA Na­tional Out­look is that a peak in new home build­ing ac­tiv­ity will be fol­lowed by a sig­nif­i­cant cycli­cal down­turn ex­tend­ing to 2017/18.”

New dwelling com­mence­ments are fore­cast to de­cline from a record peak of 220,000 last year to a trough of around 160,000 in 2017/18, while the growth in res­i­den­tial prop­erty prices will con­tinue to slow.

“The out­look for ren­o­va­tions in­vest­ment, which is re­cov­er­ing from a 12 year low, is look­ing a lit­tle brighter,” said Har­ley Dale.

“Hav­ing grown by just 0.9 per cent dur­ing the 2014/15 fi­nan­cial year, ren­o­va­tions in­vest­ment is fore­cast to grow by 2.8 per cent in 2015/16. Growth is an­tic­i­pated to in­crease by a fur­ther 1.7 per cent in 2016/17, with ac­tiv­ity then pro­jected to see mod­est yet steady in­creases out to the end of the decade.”

“This out­look for the ren­o­va­tions sec­tor doesn’t look like shoot­ing the lights out, but it is con­sid­er­ably more promis­ing than what we have faced for some years now,” con­cluded Har­ley Dale. “As with the new home build­ing out­look, if we delve be­low the na­tional sur­face there will con­tinue to be a wide di­ver­gence in con­di­tions for ren­o­va­tions ac­tiv­ity across states and ter­ri­to­ries over com­ing years.”

HIA’s Na­tional and State Out­looks are Aus­tralia’s most com­pre­hen­sive hous­ing re­port card, en­com­pass­ing ren­o­va­tions ac­tiv­ity, new home build­ing, pol­icy up­dates, global and do­mes­tic eco­nomic analysis, and ded­i­cated state and ter­ri­tory hous­ing data­bases.

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