Residential housing recovery running out of steam
New home building recovery is at risk of running out of steam according to the Housing Industry Association's (HIA) National Outlook Winter 2013 edition.
HIA Chief Economist, Dr Harley Dale said that the new home markets of New South Wales and Western Australia has driven a promising first round recovery in national housing starts but ensuring the recovery is sustainable looks unlikely based on current policy settings.
"There is not enough policy focus on housing reform at a state as well as federal government level. Consequently, a first round of new home building building recovery looks set to be stopped in its tracks," he said.
Following two consecutive years of decline, housing starts increased by 8.3 per cent last financial year to 157, 108. The HIA is forecasting a 4.2 per cent fall for 2013/14 as growth in NSW and WA runs out of steam.
The RBA decision to cut rates to the record low 2.50% in August will hopefully have the desired impact on housing growth as borrowers take advantage of low rates to buy property or renovate.
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