A new report from Macromonitor indicates that the upturn in Australia's residential building sector will continue over the next three years, despite some large negative influences during 2010.
Australian Construction Outlook 2009 - Residential Building concludes that strong and lasting upturns in demand for new dwellings from investors and changeover buyers will more than offset declines in first home buyer demand and government building work.
"There will be large negative effects coming through during 2010 and into 2011, as the First Home Owners Boost Scheme comes to an end and as dwelling starts under the Social Housing Initiative start to decline, so there is certainly a risk of a 'W' shaped upturn," says the report's author, Macromonitor director, Nigel Hatcher.
The report also notes that the peak in the unemployment rate is likely to be earlier and lower than previously expected and that despite investor demand improving more slowly, there are signs that it is improving. "The value of new finance commitments for investors purchasing new dwellings was cut in half between mid-2008 and early 2009, but has now returned to around the pre-crisis level," says Hatcher.
Macromonitor is forecasting the number of dwellings commenced to rise by 21 per cent in 2009/10 and then by a further 9 per cent in 2010/11. Despite the upturn, however, it is expected that a large deficiency of housing will persist in Australia for many years to come, as a result of strong population growth during the downturn in dwelling building.
