House build­ing on the up

Port Douglas & Mossman Gazette - - FRONT PAGE -

THERE is still un­cer­tainty around the out­look for res­i­den­tial con­struc­tion but sen­ti­ment is clearly im­prov­ing, ac­cord­ing to the Hous­ing In­dus­try As­so­ci­a­tion.

This largely re­flects new res­i­den­tial con­struc­tion at the fledg­ling stage of a re­cov­ery at a time when there are an un­usu­ally large num­ber of vari­ables in­flu­enc­ing fu­ture de­mand and sup­ply.

Heighted un­cer­tainty not­with­stand­ing, there is a brighter start­ing point for con­sid­er­ing the res­i­den­tial con­struc­tion out­look than ear­lier in the year, the HIA said.

Hous­ing starts in­creased by 11 per cent in 2012-13.

This re­sult fol­lowed two con­sec­u­tive years of de­cline which saw com­mence­ments bot­tom out at their third low­est level of the last 15 years.

At the same time that com­mence- ments posted this first round re­cov­ery, ren­o­va­tions hit a 10-year low, so the re­cent news hasn’t been all one way.

The first round of new home re­cov­ery last fi­nan­cial year was nar­rowly driven.

Dwelling starts in New South Wales and Western Aus­tralia in­creased by 31 per cent in 2012-13 to de­liver the li­ons share of the 11 per cent growth in com­mence­ments na­tion­ally. With the net­ting out of NSW and WA, starts in­creased by only 1 per cent last year. Key Points: * To date, the re­cov­ery in new dwelling com­mence­ments has been driven largely by two states – New South Wales and Western Aus­tralia.

* Prospects have bright­ened for a broader-based re­cov­ery to emerge, al­though Vic­to­ria will prove a drag on the na­tional out­come in 2013-14.

* New dwelling com­mence­ments are fore­cast to hold largely steady at a lit­tle over 160,000 in the short term, be­fore slowly re­cov­er­ing to around 170,000 by 2016-17.

* Meet­ing the fu­ture re­quire­ments of Aus­tralia’s pop­u­la­tion will re­quire a min­i­mum 180,000 dwelling starts per year over com­ing decades.

Rel­a­tively strong re­cov­er­ies in ac­tiv­ity in Queens­land and SA (of 7.7 per cent and 10.5 per cent, re­spec­tively) com­bined with the in­creases in NSW and WA, are likely to be in­suf­fi­cient to off­set the over­all de­cline.

The net re­sult of this con­trast­ing ac­tiv­ity around the key states ap­pears set to pro­vide around 160,500 starts in 2013-14.

Be­yond 2013-14, ac­tiv­ity lev­els in NSW, Vic­to­ria and WA are fore­cast to re­main at lev­els com­pa­ra­ble with those ex­pected this fi­nan­cial year.

How­ever, the re­cov­er­ies i n Queens­land and SA are fore­cast to gather mo­men­tum and drive a mod­est in­crease in dwelling starts na­tion­ally in 2014-15.

Fur­ther growth of 1.9 per cent is fore­cast for 2015-16 which would take starts back to a level around 164,000.

Af­ter two very weak years in 2011-12 and 2012-13, ag­gre­gate de­tached house starts are fore­cast to rise steadily over the medium term fore­cast hori­zon.

The 2011-12 year saw de­tached house com­mence­ments de­cline in all states and ter­ri­to­ries with the ex­cep­tion of the NT, while 2012-13 was only marginally bet­ter with five out of the eight states and ter­ri­to­ries post­ing de­clines.

In 2013-14 the HIA fore­cast this count to drop to three out of eight (Vic­to­ria, Tas­ma­nia and the NT).

Among the five states fore­cast to in­crease in 2013-14 Queens­land is ex­pected to be the strong­est con­trib­u­tor, fol­lowed by WA, SA and NSW. Na­tion­ally, de­tached house com­mence­ments are fore­cast to in­crease by 3.7 per cent in 2013/14 ahead of a 2.2 per cent in­crease in 2014-15 and a 6.4 per cent gain in 2015-16.

In terms of the other dwelling seg­ment, we an­tic­i­pate healthy im­prove­ments in 2013-14 in NSW and WA, and mod­est im­prove­ments in Queens­land and SA.

Other dwelling startrs are fore­cast to con­tract in Tas­ma­nia, the NT and the ACT, how­ever a sub­stan­tial con­trac­tion in Vic­to­ria is ex­pected to be the de­ter­min­ing fac­tor in this dy­namic.

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