All indications are that the new home building recovery will stall in 2011 according to the Housing Industry Association.
The HIA’s quarterly National Outlook Report highlights a healthy first stage new home building recovery that will run of out stream by mid next year.
“It is not too late to turn the situation around through policies targeted at new home building combined with more rapid progress in reducing structural supply side barriers,” said HIA chief economist Harley Dale. “The empirical data, observations on the ground, and the slow progress in reducing supply side obstacles all currently point to the first increase in housing starts in eight years in 2010 reverting back to a decline in starts in 2011.”
Housing starts are forecast to increase by 20% in 2010 to a level of 165,940, before falling back by 3% in 2011.
On a financial year basis, the number of housing starts is forecast to increase by 22% in 2009/10 and 2% in 2010/11 to reach a level of 162,600. Starts are forecast to be flat in 2011/12.
“Australia needs to build over 190,000 dwellings in 2010 alone to meet underlying demand and over the next ten years we need to build 420,000 dwellings more than we built over the last decade,” Dale said.
