Record lev­els of home build­ing to con­tinue

Australasian Timber - - SAWMILLING -

“NEW HOME build­ing ac­tiv­ity in Aus­tralia re­mains at el­e­vated lev­els,” HIA’s Se­nior Econ­o­mist Shane Gar­rett told the HIA’s In­dus­try Out­look Fo­rum in Can­berra.

“Solid pop­u­la­tion growth, very low in­ter­est rates and con­sis­tent gains in em­ploy­ment do mask some con­cern­ing trends with re­spect to un­der­em­ploy­ment and de­cel­er­at­ing GDP growth. Com­bined with an­other layer of ob­sta­cles to for­eign in­vestor par­tic­i­pa­tion in the hous­ing mar­ket, new home build­ing vol­umes are set to move down­wards over the next cou­ple of years.

“Hav­ing achieved record lev­els early in 2016 new home build­ing starts are clearly in a down­ward cy­cle.

“This down-cy­cle is unique be­cause we ex­pect that the bot­tom of this cur­rent cy­cle will be in 2019 when build­ing ac­tiv­ity will still be higher than at the peak of the pre­vi­ous boom in 2010.

“The peak of ac­tiv­ity in 2015/16 dwarfed all pre­vi­ous peaks and has re­sulted in a sig­nif­i­cant back­log of work which will en­sure that the in­dus­try is busy through 2017 and into 2018,” Mr Gar­rett said.

“The hous­ing boom was not con­sis­tent across Aus­tralia and now, with NSW and Vic­to­ria cool­ing, all in­di­ca­tors are that the mar­ket is well past its 2016 peak when over 231,000 new homes were com­menced.

“Even though new dwelling starts will de­cline over the next cou­ple of years, the an­nual vol­ume of new home starts is not likely to fall be­low 170,000 at any stage. By any stan­dard, this is still a very el­e­vated level of ac­tiv­ity.

“The in­vestor side of the mar­ket has also been hit by tighter lend­ing fi­nance due to APRA’s re­cent re­stric­tions on in­ter­est-only mort­gages,” he said.

HIA’s Hous­ing Out­look Re­port es­ti­mates that 221,500 new dwellings were started in 2016/17, a de­cline of 4.5 per cent com­pared with the pre­vi­ous year. A fur­ther re­duc­tion of 10.7 per cent is fore­cast for 2017/18 be­fore new home starts reach a trough of 176,670 dur­ing 2018/19.

“The multi-unit side of the mar­ket is ex­pected to drive the down­turn in res­i­den­tial build­ing, with com­mence­ments on this side of the mar­ket pro­jected to fall by 41 per cent from peak to trough,” said Mr Gar­rett.

HIA's Na­tional and State Out­looks are Aus­tralia's most com­pre­hen­sive hous­ing re­port card, en­com­pass­ing fore­casts of new dwelling con­struc­tion vol­umes and ren­o­va­tions ac­tiv­ity. The re­port also in­cludes pol­icy up­dates, anal­y­sis of global and do­mes­tic eco­nomic is­sues, as well as ded­i­cated state and ter­ri­tory hous­ing data­bases. For fur­ther in­for­ma­tion or for copies of the publi­ca­tion (me­dia only) please con­tact: Kirsten Lewis on

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