Australia's HIA predicting 11.5% decline in housing startsThe Housing Industry Association, the voice of Australia’s residential building industry, has just released the winter edition of its National Outlook, Australia’s most comprehensive housing report card. HIA’s winter Outlook confirms deteriorating conditions for the housing industry in the first half of 2012.
Following an 11.2 per cent fall in housing starts (dwelling commencements) in 2011, HIA is forecasting an 11.5 per cent decline in starts in 2012, to a level of just 133,420. This forecast reflects a marked deterioration in most leading indicators combined with a fall in quarterly housing starts in March 2012 to levels significantly below those during the GFC.
HIA Chief Economist, Dr Harley Dale says “we are experiencing a combination of softer housing demand and high-cost housing supply, which together mean that the nation is under-building by a significant amount. Put simply, Australian consumers are nervous about the global and domestic economies, and meanwhile around $200,000 of the price of a new home is due to taxation. It’s an unsustainable situation.”
On a financial year basis, housing starts are expected to bottom at a level of 135,280 in 2011/12 before posting a modest recovery to 141,870 starts in 2012/13 and 148,060 starts in 2013/14. At face-value this outlook reflects expectations of two consecutive years of recessionary conditions in the new home building sector, followed by a recovery to a level still many thousands of starts below the decade-average. This view incorporates revisions from previous forecasts of 137,820 starts in 2011/12, with a recovery to 151,200 starts in 2013/14.
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