Recovery in new homes market in Australia not sustainable, says the HIA
A recovery in the new homes market in Australia looks unsustainable because there is not enough focus on housing reform at governmental level, it is claimed.
According to the Housing Industry Association, the voice of Australia’s residential building industry, the new home building recovery is at risk of running out of steam.
In the latest edition of its National Outlook report, it says that a strengthening in the new home building markets of New South Wales and Western Australia has driven a promising first round recovery in national housing starts.
But that does not mean that the trend will continue. ‘Ensuring the recovery is sustainable is the key, but that looks unlikely based on current policy settings. There is not enough policy focus on housing reform at a state as well as federal government level,’ said HIA chief economist Harley Dale.
‘Consequently, a first round new home building recovery looks set to be stopped in its tracks. Such an outcome would be detrimental to an improvement in housing affordability, a faster pace of economic growth, and a lift in the nation’s productivity performance,’ he added.
The HIA estimates that housing starts increased by 8.3% last financial year to a level of 157,108, following two consecutive years of decline. A fall of 4.2% is forecast for 2013/2014 as growth in New South Wales and Western Australia temporarily runs out of steam before a geographically broader based recovery takes sufficient hold.
The HIA estimates that total investment in renovations fell by 6.6% in 2012/2013 to reach a decade low. Growth of 3.5% is forecast for this financial year, which would take investment to a level of $28.9 billion. This would be $1.8 billion short of the record achieved in 2010/2011.
In May this year the HIA launched its Federal Election 2013 policy platform to provide a blueprint for a future federal government to address the growing housing affordability challenge facing Australia and to ensure a sustainable residential construction recovery commensurate with the needs of the Australian economy and its growing population.