Australians building less and renovating more

Australians building less and renovating more

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It looks like three consecutive years of increased homebuilding is about to be followed by three years of reduced construction activity.

The Housing Industry Association (HIA) has forecast that housing starts will fall 22.0 per cent between 2014-15 and 2017-18 after rising 46.1 between 2011-12 and 2014-15.

There were 145,040 housing starts in 2011-12 – this then increased 12.4 per cent to 163,040 in 2012-13, 11.2 per cent to 181,240 in 2013-14 and 16.9 per cent to 211,860 in 2014-15.

Forecasts suggest that housing starts will now decline – by 5.5 per cent to 200,280 in 2015-16, 13.4 per cent to 173,510 in 2016-17 and 4.7 per cent to 165,310 in 2017-18.

HIA chief economist Harley Dale said this pattern is not unexpected, because a peak in new home construction is usually followed by an abrupt decline.

Meanwhile, as homebuilding slows, renovations activity looks set to speed up.

Australians conducted an estimated 28,551 renovations in 2014-15, with activity forecast to rise 3.7 per cent to 29,611 in 2015-16.

This figure is then expected to remain about steady at 29,608 in 2016-17, before climbing 1.6 per cent to 30,074 in 2017-18.

[Related: How the market will look in 2020]

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