Western Australia has strongest residential property market in the country
The Australian Capital Territory took a tumble down the league table sliding from fourth to sixth and a recovery in Queensland is continuing, according to the latest bi-annual housing report from the Housing Industry Association.
‘Lower levels of activity in multi-unit segment drove the ACT decline, although there were also emerging signs of weakness in the ACT’s detached house building market,’ said Geordan Murray, HIA economist.
‘The recovery in Queensland continues to gather momentum. The analysis shows the improvements can be attributed to a boost in multi-unit home building. While Queensland still ranks as the second weakest jurisdiction nationally, the margin to the states sitting mid-table has narrowed markedly,’ he added.
Overall, the report shows that Western Australia and New South Wales have caught up to Victoria in terms of historically high levels of new home building activity. However, activity in these states no longer appears to be rising.
Murray said at this point in time, future growth hinges on the capacity of the Queensland market to sustain the recovery.
Meanwhile, preliminary figures from the Australian Bureau of Statistic provide further evidence that the new home building upturn may have peaked earlier in 2014.
During the September 2014 quarter, a total of $13.4 billion worth of work was done in the residential construction sector, a 1.6% decrease on the previous quarter, although it was 8.6% higher than a year earlier.
Total work done on new dwelling construction fell by 1.8% during the quarter, but was still some 9.5% higher than the same period of the previous year. Renovations work done was unchanged during the September 2014 quarter and was 2.8% higher than a year earlier.
‘These figures provide further evidence that the upturn in new home building activity may have peaked during 2014. Australia needs to build about 180,000 homes per year over the longer term to meet its requirements,’ said HIA senior economist Shane Garrett.
‘We have only recently reached this threshold, and the fact that we are moving below it again bodes poorly for the country’s housing prospects. We also concerned to see that the renovations market has not made any headway over the most recent quarter. This is an area of residential construction that has endured a slump over the past few years,’ he explained.
‘We are in danger of falling behind in the quest to provide enough housing for future generations of Australians. Several factors act as major obstacles to the ensuring sufficient levels of new home building. It is vital that issues like land supply bottlenecks, planning delays and excessive taxation are dealt with as a matter of urgency,’ he added.
Looking ahead, the ABS housing finance figures provide a positive signal for new home building activity in early 2015. While total lending to owner occupiers, excluding refinancing, eased by 1.4% in October, loans to those constructing a new home expanded by 1.5% to a level that is 14.6% higher than 12 months previously.
Loans for new housing increased year on year by 61.5% in Tasmania, by 35.1% in the Northern Territory, by 12.3% in ACT, by 9.5% in Victoria, by 8.5% in Western Australia, by 4.2% in Queensland and by 1.2% in New South Wales. South Australia saw a fall of 3.3%.