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Construction of new homes set to drop by nearly half, says HIA

Construction of new homes set to drop by nearly half, says HIA

Experts are bracing for a massive drop in activity in the housing sector, with construction of new dwellings expected to fall nationally by 43%, according to the Housing Industry Association (HIA).This would put the number of new homes being worked on next financial year at 112,000 – down from nearly 200,000 in FY19.In NSW, the shock is predicted to be even greater. The HIA report estimates housing starts will drop by 27.5% this financial year and a further 34% in FY21.HIA regional director David Bare said the coronavirus pandemic has caused fissures all throughout the residential building industry and recovery is not expected for another two years. “New South Wales was already in a vulnerable position, with the housing market cooling over the last few years and a significant amount of apartment supply still to come online,” he said.Travel restrictions currently in place are also a cause for concern, especially in major cities like Sydney and Melbourne where net overseas migration accounts for the majority of population growth."The further shock to housing demand from the loss of foreign students, tourists and migrants - who are particularly valuable to the state - is a particularly worrying development,” Bare said. "The 625,000 overseas students enrolled in Australian education institutions equates to demand for the past two years of apartment construction. It is not clear how many of these left in March or how many will return.”

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