New home building surged ahead in the December 2009 quarter, says the HIA.
HIA's chief economist, Dr Harley Dale, says the result confirmed the success of targeted fiscal stimulus and low variable mortgage rates in driving the first stage of a housing recovery.
"There will be a healthy recovery in housing starts in the 2009/10 financial year, but today's result does nothing to answer the question of whether that recovery can be sustained once the impact from fiscal and monetary policy stimulus comes to an end," Dale says.
Dale says the prospect for a second stage to the recovery is threatened by underlying supply side issues, including a widespread lack of available finance and re-emerging land and labour shortages.
"Leading housing indicators are already sending mixed signals as to whether the new home building recovery is sustainable. That sounds a note of caution to ensure that interest rates are not raised too quickly, something that would, perversely, increase the chances that the recovery petered out," Dale says.
According to the Australian Bureau of Statistics figures released, housing starts increased by 15.1 per cent in the December 2009 quarter to an annualised level of over 160,000, following an upwardly revised 11 per cent rise in the September quarter.
Detached house starts increased by 14 per cent in the December 2009 quarter following a 10 per cent lift in the September quarter.
Other residential building starts increased by 18 per cent at the end of last year following a rise of 14 per cent in the September 2009 quarter.
The number of housing starts (including conversions) in the December 2009 quarter grew by 16.5 per cent in NSW, 15.6 per cent in VIC, 13.4 per cent in QLD, 8.7 per cent in SA, 2.3 per cent in WA, 0.8 per cent in TAS, 12.2 per cent in the NT, and 33.8 per cent in the ACT.
