Despite an increase in the number of new home constructions, numbers are still low, according to the Housing Industry Association
HIA Chief Economist, Tim Reardon confirmed an increase of 1.1 per cent on the number of new homes commencing construction in the June quarter yesterday, but it wasn’t all good news.
The ABS figures showed that despite this small improvement in new home starts, they remain 20 per cent lower than against the same period last year.
“The increase in total starts was due to a 21 per cent lift in multi-unit starts, mainly in NSW and WA. Detached housing starts have slowed to their lowest level since December 2013,” said Mr Reardon.
At a glance:
• Increase of 1.1 per cent in new house builds over June quarter
• Despite rate cuts the market hasn’t hit the bottom of the cycle yet
• ACT and Tasmania were the only states/territories to increase in house starts over the past year.
“More recent data informs us that the downturn in detached home starts has slowed. The impact of three cuts to interest rates and small fiscal stimulus has slowed the decline in work entering the pipeline."
Mr Reardon said the slowdown in building activity over the past 18 months had adversely affected the national economy and has been one of the main drags on GDP growth.
“A return to normal lending conditions would provide a boost to home building and the wider economy, “ said Mr Reardon.
Indications are that the downturn in new projects entering the pipeline are starting to improve following cuts to interest rates but the market is not yet at the bottom of this cycle.
Annual housing starts during the 2018/19 financial year fell in all states and territories, with the exception of the Australian Capital Territory (+17.8 per cent) and Tasmania (+5.3 per cent).
The largest annual fall was recorded in the Northern Territory (-28.4 per cent), followed by South Australia (-22.6 per cent), Victoria (-17.8 per cent), Western Australia (-14.3 per cent), Queensland (-13.9 per cent), and New South Wales (-13.1 per cent).
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