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HIA questions construction recovery

By Staff Reporter
20 January 2010 | 1 minute read

Despite a recent improvement in residential construction, the Housing Industry Association’s (HIA) chief economist Harley Dale has said the current up-cycle will not be sustainable long term.

According to Mr Dale, persistent supply obstacles will hinder any true recovery in residential construction.

“First home buyer-related activity, the Social Housing Initiative, and the lagged impact of very low mortgage rates will combine to generate growth in new residential work done in 2009 and 2010,” Mr Dale said.

“It remains unclear, however, whether the recovery can gather legs beyond this year in the face of persistent supply side obstacles, rising interest rates, and what to date is an insufficient number of upgrade buyers and investors to fill the void left by first time buyers.”

Figures from the Australian Bureau of Statistics (ABS) showed seasonally adjusted work done on new residential dwellings increased by 2.8 per cent in the September 2009 quarter to an annualised worth of $36.3 billion –3.9 per cent down on the September 2008 quarter.

Work done on detached houses increased by 6.5 per cent over the September 2009 quarter, however, work done on other residential building dropped by 5.5 per cent.

“There was brighter news on the renovations front in the September 2009 quarter with the volume of work done on major alterations and additions increasing by 3.9 per cent following four consecutive quarters of decline,” Mr Dale said.

“The renovations sector should continue to recover after a soft 2008 and 2009 as labour market conditions improve further and gains in home prices bolster confidence.”

HIA questions construction recovery
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Do you have an industry update?

top suburbs

12 month growth
Box Hill
127.02%
Mollymook
82.85%
Brightwaters
79.93%
Cleve
78.13%
Bawley Point
76.2%
Murrays Beach
75.57%
Terranora
70%
Crescent Head
69.38%
Park Ridge South
68.32%
Mollymook Beach
67.09%
SEE AREA REPORTS ON SMART PROPERTY INVESTMENT WEBSITE
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