Dwelling commencement rates highlight construction opportunities

By the resi financial blog team, 25 November 2013

Dwelling commencement rates highlight construction opportunities

The home construction industry has seen a steady recovery over the last year, with expectations that it will continue well into the new year. This highlights the opportunity for people to secure a construction loan and make their property dreams come true.

The latest National Outlook, released by the Housing Industry Association (HIA), has shown the number of dwelling commencements increased this year, following a decade-long low. Furthermore, a recovery in the renovation market was also recorded during this period.

Senior Economist for the HIA, Shane Garrett, said in a November 13 statement that the improvement in dwelling statistics is an encouraging result for 2012/13. Mr Garrett expects this to grow further as the nation heads into 2014/15.

Queensland, New South Wales and Western Australia have been touted as the regions which will see the most growth in housing starts during 2014, while renovations will be much more broad-based and spread across the nation.

"Looking further ahead, we see dwelling commencements lifting above the 170,000 per year mark by 2016/17, matching the highs achieved during the post-GFC stimulus," said Mr Garrett.

"Over this timeframe, renovations activity is also likely to increase steadily, reaching $30.3 billion by 2017/18."

Mr Garrett went on to say that the economic climate of the nation was responsible for the increase in housing growth, with low interest rates and strong population growth driving the demand for new homes.

"There currently exist many bottlenecks around land supply, infrastructure and the time taken to achieve planning approval for new dwellings," said Mr Garrett.

However, government planning reform - both federal and state - was highlighted as one of the crucial aspects to facilitating this supply.

This could be encouraging news for anyone considering taking out a construction loan and creating their dream home in the future.

Categories: Home Loans, Property Investment