The Housing Industry Association (HIA) is calling on the federal government to inject more funds into the construction of residential property.
Latest data from the Australian Bureau of Statistics (ABS) found dwelling commencements fell seven per cent over the 2011 financial year.
In the June 2011 quarter, total seasonally adjusted dwelling commencements fell by 4.7 per cent to 37,820. Detached house commencements fell by 2.2 per cent to 23,106 while commencements of ‘other dwellings’ dropped by 8.8 per cent to 14,406.
"Renewed weakness in dwelling commencements began in mid-2010 and reflects a lack of policy reform progress in reducing the high cost base to new housing and a deterioration in household confidence and demand. Commencements look set to fall considerably further in 2011/12,” HIA chief economist Harley Dale said.
“Dwelling commencements are running at an annualised level of just over 151,000 in the June 2011 quarter, before accelerated weakness in leading indicators mid-year is accounted for.”
"The urgent need for stimulus to kick start new home building is crystal clear as Australia moves further away from the underlying demographic demand for around 175,000 dwellings per annum.
"A kick-start to the policy reform process is vital to ensuring a sustainable recovery in new home building can emerge. In this regard the upcoming Tax Forum has the capacity to form the starting platform for driving a process of reform of Australia’s federalism model to remove inefficient (largely state) taxes, reduce the total number of taxes, and boost Australia's productivity.”