Home-building contraction has ‘run its course’

By Emma Ryan 27 February 2020 | 1 minute read

New insight derived from HIA and the ABS has provided pivotal insight into home-building activity.

Home building contraction

According to HIA senior economist Diwa Hopkins, the “credit squeeze” and its impact on home building weighed heavily on Australia’s economy in 2019.

Taking into account preliminary figures recently released by the ABS, Ms Hopkins said: “A total $65.35 billion worth of construction work was done on new housing in 2019, 8.5 per cent less than the record-level of activity in 2018.”

“This home-building contraction has just about run its course. Confidence returned to the overall housing market at the end 2019, buoyed by interest rate cuts and house prices returning to growth.

“We expect the improved conditions will flow through to the new home building side of the market this year.”


The coming home-building cycle is likely to be a “fairly modest affair”, Ms Hopkins said, noting that forecast growth in home building is set to be slow.

“We estimate the industry commenced construction on 174,770 homes in 2019, and we are forecasting for activity to rise only marginally (by 0.6 per cent) in 2020.

“International factors may, however, impact on the volume of home building in Australia over the medium term,” concluded Ms Hopkins.

Home-building contraction has ‘run its course’
Home building contraction
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