Residential construction activity dropped in December, suggesting that skilled labor shortages may already be constraining building activity.
According to the Australian Bureau of Statistics, residential construction was down 3.9 per cent in December.
“The tripling of the First Home Owner Grant for new dwellings, aggressive cuts to mortgage rates, and the Social Housing Initiative will all drive the first round new home building recovery. Work in the pipleine increased considerably over the December quarter last year,” HIA chief economist Harley Dale said.
“The quarterly decline in actual home building activity in December 2009 is a reminder of the importance of ensuring sufficient skilled labour is available to keep the wheels of recovery turning.”
The 3.9 per cent fall in new residential building work done in the December 2009 quarter reflected a 3.3 per cent decline in detached houses and a larger 5.3 per cent drop in other residential buildings.
“On a positive note, the volume of work done on major alterations and additions rose for a second consecutive quarter in December 2009, up by 2.8 per cent following a 6.3 per cent lift in September,” Mr Dale said.
Home price gains and the better than expected performance of the labour market have restored confidence to the renovations sector and as such, Mr Dale said he expects 2009/10 to be a much stronger year.