The assessment comes after official figures released by the Australian Bureau of Statistics shows that the overall value of residential construction work done on new dwellings declined by 2.5% in the final quarter of 2013.
‘We are seeing good things across a number of leading indicators, but this data reaffirms our view that the speed and strength of the recovery in residential building has been overstated in some forums,’ said HIA economist Geordan Murray.
‘The improved levels of activity we have seen to date have been driven almost entirely by the multi unit segment. While this is an increasingly significant component of the housing mix, a true recovery in new home building requires a consistent and aligned increase in detached homes as well as multi units,’ he explained.
‘Clearly, the need for policy reform to support housing supply remains a priority if housing is to make the expected contribution to economic growth,’ he added.
The data also shows that value of work done on new detached homes declined by 0.9% in the December quarter of 2013 to a level that is 5.1% below that of a year earlier. The value of work done on multiunit construction declined by 4.9% in the December quarter of 2013 although remained 5.9% above the level recorded in the December quarter of 2012.
‘On a more positive note, it is encouraging to see some improvement in the renovations sector. Activity in this part of the market had dropped to a decade low in the middle of 2012. It appears that low interest rates and rising home prices are providing a much needed boost to demand in this segment,’ Murray pointed out.
The value of work done on renovations increased by 3.2% during the quarter but remains 0.4% below the level recorded in the corresponding period last year.
