SA housing sector 'desperately needs a shot in the arm'
Leaders at the Housing Industry Association (HIA) believe the property sector in South Australia is in desperate need of a "shot in the arm".
The organisation has voiced its concerns about the sorry plight of the state's house building industry after two prominent local construction firms were forced to enter administration.
Nu Steel Homes and Ian Wood Homes – which have more than 90 years of trading experience between them – have found the going tough as the number of new developments receiving planning permission has fallen in recent years.
Executive director of HIA South Australia Robert Harding said that government action is needed urgently if the housing sector is to recover from its current predicament.
"The residential building industry is in one of its worst downturns. There's a 40 per cent slump in housing starts," he remarked.
Recent figures published by the group showed that the national construction sector contracted at is sharpest rate for 12 months in September.
The seasonally adjusted index declined by 1.3 points during the month to 30.9. Scores under 50 are said to highlight a receding market.
Mr Harding stated that building contractors are trading at a loss and he feels Aussies need to have more incentive to take out a mortgage in order to buy their own home.
"We need families to get into the housing market, which will stimulate economic activity, generate jobs for the economy and give the economy the boost it needs," he added.
"We welcome the government's confirmation it will work to speed up the approval process for new homes, but more needs to be done."
The Reserve Bank of Australia's decision to reduce interest rates last week could have a positive impact on the nation's property sector.
Clearly the central bank is hoping that more people will secure a home loan while rates are at a three-year low of 3.25 per cent, although this all depends on the country's banks passing these savings on.
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