New home building in Australia reaches 20 year high

Taylor Scott International News

New home building in Australia has reached a 20 year high, heralding a recovery in the industry, according to the Housing Industry Association (HIA), the voice of Australia’s residential building industry. According to HIA senior economist, Shane Garrett, back in early 2012 when activity was so low, the prospect of breaking through 180,000 starts within a couple of years was beyond almost everybody’s most optimistic expectations. But the latest figures from the Australian Bureau of Statistics are not all good news as the multi-unit dwelling segment saw a sharp fall during the second quarter of this year, with detached house building also nudging down a little. On the renovations side, the volume of work done also fell, with a 3% reduction in activity during the June 2014 quarter. But overall new housing starts totalled 45,527 in seasonally-adjusted terms. Despite representing a 6.9% decline on the previous quarter, these figures mean that total starts during 2013/2014 was 180,833, the highest 12 month total since March 1995. Detached house commencements slipped by 1.1% during the quarter while other dwellings saw a 15% slide in seasonally adjusted terms. The new HIA Economics report Housing Australia’s Future estimates that about 186,000 new homes will be required annually between now and the year 2050. ‘Even in such a strong upturn, we are still short of this requirement today. This is a stark illustration of the serious supply side issues which will need addressing,’ said Garrett. ‘A number of factors continue to plague the capacity of the new home building sector. These include high taxation, stamp duties, planning restrictions, and delays in making residential land available,’ he explained. ‘Failure to tackle these constraints will mean that the ability of the industry to provide for Australia’s long term housing requirements will continue to be seriously undermined,’ he added. A breakdown of the figures show that new home starts in the June quarter fell by 12.3% in New South Wales, by 3.3% in Victoria, by 1.3% in Queensland, by 1.7% in South Australia and by 48% in the ACT. Three states saw building commencements rise during the quarter. They were up 2% in Western Australia, by 28.7% in Tasmania and by 18.3% in the Northern Territory. Continue reading →

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