Modest Recovery for Residential Construction

Article excerpt

THE Housing Industry Association, the voice of Australia's residential building industry, this week released the spring 2012 edition of its Queensland State Outlook, the most comprehensive housing report card for Australia's sunshine state.

HIA's spring Queensland Outlook points to a mild recovery in new housing starts in 2012/13 together with further growth in renovations activity.

aFrom a starting point where the new home building sector has been in recession for the last four years, there needs to be some evidence by now of improved prospects on the horizon,a said HIA executive director Queensland Warwick Temby.

aThere is some evidence of an impending recovery, but it remains far from compelling.

aNevertheless, we are still forecasting a recovery in housing starts in 2012/13, with a 7.5 per cent increase to a level of 28,252.

aDespite such a modest outlook, there remains the risk that we fall short of this mark.

aRenovations activity, meanwhile, is forecast to increase by 0.6% this financial year following relatively healthy growth of 3.7% in 2011/12.

aThere are a range of factors that will constrain a recovery in residential construction, including an on-going process of household deleveraging, the lack of full pass-through of interest rate cuts, tight credit supply, and the large amount of work yet to be done to reduce the excessive taxation of new housing. …