New home building recovery at risk of running out of steam: HIA

Stephen TaylorDecember 7, 2020

A first round new home building recovery looks set to be stopped in its tracks without increased policy focus on housing reform at a state and federal government level.

That’s the view of chief economist Harley Dale speaking at the launch of the HIA’s winter 2013 edition of its National Outlook.

Putting forward its ‘’comprehensive national report card’’ Dale predicts the new home building recovery is ‘’at risk of running out of steam’’ and that there will be a gradual improvement in renovations investment from a 10 year low.

“A strengthening in the new home building markets of NSW and Western Australia has driven a promising first round recovery in national housing starts,” he says.

“Ensuring the recovery is sustainable is the key, but that looks unlikely based on current policy settings.”

Dale says a policy focus on housing reform at state and federal levels was crucial for a first round new home building recovery. “Such an outcome would be detrimental to an improvement in housing affordability, a faster pace of economic growth, and a lift in the nation’s productivity performance.”

HIA estimates housing starts rose 8.3% last financial year to 157,108 following two consecutive years of decline. A fall of 4.2% is forecast for 2013/14 as growth in NSW and WA temporarily runs out of steam ‘’before a geographically broader-based recovery takes sufficient hold’’.

HIA estimates that total investment in renovations fell by 6.6% in 2012/13 to reach a decade low. Growth of 3.5% is forecast for this financial year, which would take investment up to $28.9 billion. This would be $1.8 billion short of the 2010/11 record.

In May this year HIA launched its Federal Election 2013 policy platform - Housing Australians - outlining 50 policy actions for a future federal government. These aim to address the growing housing affordability challenge facing Australians and to ensure a sustainable residential construction recovery to suit the economy and growing population.

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