Australia Faces Homebuilding Recession

Australia’s Housing Industry Association reported a slight recovery in new home sales following a weak first-quarter opening in 2012, but analysts point out that the projections for sales …

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Australia’s Housing Industry Association reported a slight recovery in new home sales following a weak first-quarter opening in 2012, but analysts point out that the projections for sales and government building for the year will not be enough to avoid recessionary levels. This has spurred yet more calls for government reform that market observers say should include interest rate cuts and reducing the tax burden of residents who are struggling with job losses. For more on this continue reading the following article from Property Wire.

New home sales in Australia mounted a partial recovery in April following a very weak end to the first quarter of 2012, according to the Housing Industry Association, the voice of Australia’s residential building industry.

HIA chief economist, Harley Dale, said that an April lift in new home sales of both detached houses and multi units was an imperative result.
 
But he warned that even with this latest improvement, the aggregate volume of both new home sales and local government building approvals imply that in the absence of a rapid and sustained recovery, national new home building is heading to a recessionary level in 2012.

‘That’s an unfortunate fact which everybody needs to face and which requires further interest rate cuts and immediate government action. We keep hearing that Australia is one of the world’s strongest economies in aggregate. That’s a redundant concept if people on the ground aren’t feeling and experiencing that, and they haven’t been for quite some time,’ said Dale.

‘Further interest rate cuts are required and the Reserve Bank should just get on with the job on 05 June 5th. However, rate cuts are not a panacea and the key to a housing recovery lies with governments at all levels,’ he explained.

‘Job losses are mounting and governments need to collectively act to revitalise new home building through reducing the sector’s excessive tax burden and through an immediate injection of investment and funding,’ he added.

The HIA – JELD-WEN New Home Sales report, based on a survey of Australia’s 100 largest builders, showed a rise of 6.9% in total seasonally adjusted new home sales in April 2012. Detached house sales rose by 6.4% while multi-unit sales were up by 10.3%.
 
In April 2012 the number of seasonally adjusted new detached house sales increased by 17.2% in Victoria ahead of the removal of the First Home Bonus.

Detached house sales also increased in Western Australia by 9.8% and New South Wales by 1.8%. Detached house sales fell by 5.9% in South Australia and by 5.5% in Queensland.

This article was republished with permission from Property Wire.

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