The Australian Bureau of statistics reports that housing starts plummeted in the first quarter of 2012 by 12.6%, and many argue that there will be no turnaround forthcoming without investment in the sector and policy reform. The Housing Industry Association reports that construction numbers have been dropping since the global financial crisis and are lower now than they have been since 1996. Analysts say the weakness in housing starts has a negative chain reaction on the wider economy and is why reform in this area would help facilitate broader growth. For more on this continue reading the following article from Property Wire.
The new build property sector in Australia needs urgent investment and reform to boost the country’s new housing supply, it is claimed.
The latest figures from the Australian Bureau of Statistics shows that new starts fell sharply in the March 2012 quarter. They were down 12.6% overall, with detached houses down 7.7% and other dwellings down 21.1%. The number of seasonally adjusted dwelling commencements fell in six of the eight states and territories. They fell by 37.4% in New South Wales, 8.3% in Victoria, 4.8% in Western Australia, 15.8% in Tasmania, 0.4% in the Northern Territory, and 41.2% in the ACT. Seasonally adjusted dwelling commencements increased by 2.5% in Queensland and by 0.6% in South Australia.
‘Dwelling commencements have been declining since the middle of 2010 and are currently running at an annualised level of 122,492,’ said Harley Dale, chief economist of the Housing Industry Association (HIA), the voice of Australias residential building industry. ‘Excluding the new home building recession around the global downturn, this is the lowest level for dwelling commencements since the September quarter of 1996. Furthermore, it is a weaker outcome than was evident at any time during the global financial crisis’, he explained.
‘Carve through the current argy bargy about how strong or weak the Australian economy is and you find that new housing is unequivocally weak. That situation has significant implications for the wider domestic economy in 2012’, he added. He pointed out that recent encouraging moves by some state governments notwithstanding, the continued deterioration in new housing supply is a poor indictment on Australia’s policy makers.
‘While poor weather conditions together with an especially weak quarter for New South Wales weighed on the results, eight consecutive quarters of trend decline would be there for all to see regardless. That is an unacceptable outcome for Australian households and for thousands of Australian businesses. Investment and reform needs to happen now and the lack of action is a conspicuous and damaging hole in Australia’s policy focus’, he added.
This article was republished with permission from Property Wire.