Property Market Information: Economic growth pushed by new home building

By the resi financial blog team, 19 August 2014

New homes drive economy

The latest Housing Industry Association (HIA) release has highlighted the strength of Australia's residential property building market, which could present a wonderful opportunity for those considering the construction of their own property in the near future. 

HIA Chief Economist Harley Dale said the latest National Outlook has confirmed that the new home building market has grown in the wider economy, providing new properties and employment opportunities across the country. 

"New dwelling commencements, the key metric for the sector, are forecast to hit over 184,000 in 2014, which would be the second highest level on record, before maintaining a historically high level next year. Meanwhile, following three years of decline, total investment in renovations is forecast to post modest growth this year and next," said Mr Dale in an August 11 statement. 

For example, new dwelling commencements are forecast to increase by 9.6 per cent over the year, following an 11.1 per cent growth over 2013 - rising to a peak of 184,291 housing starts. Furthermore, more households are predicted to undertake alterations to their properties. Investment in renovations across the nation are expected to increase by 3.8 per cent this year and a further 1.3 per cent in 2015, reaching a total value of over $29.4 billion. 

"The current recovery in residential construction still masks considerable differences in conditions across states and territories, and in terms of building type, for both new housing and renovations activity. A further broadening of the recovery would certainly be a desirable outcome," said Mr Dale. 

He went on to say that a shortage of released land, excessive planning delays and a shortage of skilled labour were just three examples of the barricades to future growth in Australia, calling for government intervention to help further stimulate the market's development. 

If you're interested in starting your own home building plot, get in touch with the team at resi to discuss the home loan options available to you. 

Categories: Home Loans, Personal Finance