More evidence has emerged that property prices may be cooling, with Australia on track to build a record number of new homes in 2014.
Housing starts are forecast to reach 188,000 this year, which would be 13.3 per cent higher than last year’s result, and 0.5 per cent higher than the previous record of 187,000 in 1994.
Australia built 151,200 new homes in 2012 and 168,000 in 2013, and is forecast to build 183,900 in 2015 and 177,300 in 2016.
The data comes from the Housing Industry Association (HIA), which compiles a housing report card every quarter.
Chief economist Harley Dale said while housing starts have reached an impressive level, Australia will have to keep up this rate if it is to adequately house its growing population in coming decades.
Dr Dale also said that the surge in homebuilding has provided a substantial boost to Australia’s economy during a time of below-trend growth.
“Record-low borrowing costs have combined with other factors such as high net overseas migration to unleash substantial pent-up demand for new housing,” he said.
“These factors will keep the level of new homes commenced at historically elevated levels.
“However, what the economy needs is further growth in new homebuilding over the next couple of years, but that will only occur as a consequence of taxation and regulatory reform.”
Meanwhile, Australia is also on track for an expansion in home renovation activity, according to the HIA. Renovations fell from 29,400 in 2012 to 28,000 in 2013. Forecasts suggest renovations will increase to 28,600 in 2014, 29,000 in 2015 and 29,700 in 2016.