Australia’s housing industry is looking good this year based on the recently released Summer 2014 edition of the National Outlook report by the Housing Industry Association (HIA).
Housing industry to be “good news story” this year
The report suggests that the Australian housing industry will be one of Australia’s ‘good news’ stories over the next 12 months, according to HIA senior economist Shane Garrett.
Garrett says HIA’s most recent report “outlines the continuing, albeit gradual, broad-based recovery in residential construction”. He adds that for only the second time in a decade, construction on new dwellings is predicted to breach the 165,000 threshold. Markets like NSW, Queensland and Western Australia will drive the stronger activity, but Garrett warns other states notably Victoria and Tasmania will still remain a challenge.
For 2014, HIA forecasts that the official cash rate will stay the same and that the low-interest rate environment that drives the growth of the housing industry will continue.
Housing starts increase, renovations fall
Much of the report’s optimism comes from the fact that for the 2012-2013 period, there was an 11.7 per cent increase in housing starts, which totaled 161,970. The increase comes after two straight years of declining housing starts. The report also predicts that there will be a 2.8 per cent increase in housing starts for 2013/2014. By 2016/2017, activity is expected to reach 170,000.
A little sobering is the report on renovations, which fell by 8.9 per cent in 2012/2013 to $28.3 billion, a low point for the sector. However, the report is still optimistic that the volume of activity for the renovation sector will increase by 1.9 per cent in 2013/2014 and will continue to rise each year until 2017/2018, when the value of renovations will reach $32.6 billion.
Click here to get the latest National Outlook report.