Residential building activity has fallen in the June quarter, according to data from the Australian Bureau of Statistics.
Seasonally adjusted residential building activity fell 2.6 per cent to $9.7 million while non-residential building activity fell 9.5 per cent to $7.7 million in the three months to June.
Harcourts Western Australia chief executive officer Robert Moore told Real Estate Business that while the slump in construction activity would not affect estate agents in the short term it there were concerns about a longer term shortfall.
“While the short term impact would be minimal, less construction activity could, in the longer term, force resale prices up.
“If that was to occur, the Reserve Bank would step in and raise rates, which would have an impact on the number of prospective buyers,” Mr Moore said.
Housing Industry Association chief economist, Harley Dale, said while the end of 2009 should see a small recovery in home building, a reasonable lift in construction won’t occur until mid 2010.
“Low interest rates, the First Home Owner Boost, and federal programs such as the Social Housing Initiative will all contribute to a much needed recovery in new home construction in 2009/10 following a five year trend decline,” Mr Dale said.
“It is clear, however that residential projects are getting bogged down in the approvals process - the rate of increase in building approvals in 2009 to date is lagging considerably behind the strong surge we have seen in new home lending.”
The weakness in seasonally adjusted new residential work done in the June 2009 quarter was primarily reflected in Queensland where activity fell by 13.5 per cent and New South Wales where there was a decline of 2.1 per cent.