The Housing Industry Association has released the winter edition of its National Outlook, Australia’s most comprehensive housing report card. The winter Outlook forecast fall of 13 per cent in housing starts over the two year period 2010/11 — 2011/12.
HIA Chief Economist, Dr Harley Dale, said that the stimulus-driven boost didn’t get new housing out of the harbour in 2009/10 before renewed weakness landed the recovery on the rocks.
“Housing starts are forecast to decline over 2010/11 and 2011/12, reaching a low of 143,770. Excluding the two recessionary years for new home building around the GST and the GFC, this would be the weakest level of starts since the mid 1990’s,” said Harley Dale.
“Sentiment and activity in the new housing industry has been buffeted by higher interest rates, continuing tight credit conditions, incessant chatter about a fictitious property bubble, an astoundingly high taxation burden, and a complete lack of progress on policy reform to reduce unnecessary new housing costs,” Harley Dale said.
“Housing is shelter, a true essential of life. It is disappointing to see such an economically and socially vital element seemingly absent from serious public policy debate in this country,” said Harley Dale.
“Instead of taking real steps to remedy a range of housing supply problems, governments seem happy to extract ever-increasing amounts of tax, fees and charges from the new home industry. Of course the carbon tax will be just the next example of this approach of raising costs for the industry which provides a roof over people’s heads,” said Harley Dale.
“On a happier note the renovations segment of the housing market looks in a reasonably fit shape and HIA expects activity to ease slightly in 2010/11 to be worth $30.77 billion. Growth of 2.7 per cent is forecast in 2011/12 and 4.6 per cent in 2012/13, which would take annual renovations expenditure to just over $33 billion.
This level would be close to the record high for expenditure on renovations, which under ABS revisions is now recorded as having occurred in 2004/05,” Harley Dale added.
