Australian Bureau of Statistics (ABS) figures released this week show residential building activity contracted in the March 2012 quarter.
The total value of residential building work done fell by 1.9 per cent in the March quarter with new dwellings down by 1.2 per cent and renovations down by a sizeable 5.5 per cent
Housing Industry Association (HIA) Senior Economist, Andrew Harvey noted that new residential building work done has now fallen for four consecutive quarters, while renovations work done has fallen for three consecutive quarters.
“Combined with leading indicators which show further weakness ahead, there is no doubt that the Australian home building industry is in recession," said Harvey.
Comparing the March 2012 quarter with the March 2011 quarter, new housing work done is down by 8.7 per cent while renovations (alterations and additions) activity is down by 5.5 per cent.
In terms of the jurisdictions, when comparing the March 2012 quarter with the March 2011 quarter, the total seasonally adjusted value of residential work done fell by 14.8 per cent in NSW, 0.8 per cent in Victoria, 3.2 per cent in Queensland, 8.5 per cent in South Australia, 17.7 per cent in Western Australia, 11.0 per cent in Tasmania, and 2.8 per cent in the ACT. In trend terms, the value of residential work done rose by 0.7 per cent in the Northern Territory.
Wilhelm Harnisch, CEO of Master Builders Australia said the statistics back up the findings of other surveys that show there is considerable uncertainty and reluctance amongst new home buyers.
"While today's data is a look into the 'rear mirror,' forward housing indicators do not provide much optimism for a sustainable housing recovery taking place this year.
"The industry is anxiously awaiting the cumulative effect of four Reserve Bank rate cuts totalling 1.25 per cent over recent months to kick in.
"The March ABS figures indicate the rate cuts from November and December 2011 haven't had the effect they typically would have. The industry is relying on the effect from last year's cuts, and the rate cuts in May and June this year begin to take hold.”
