Housing decline worse than during GFC
The housing industry is doing worse now than at any point during the global financial crisis (GFC), the Housing Institute of Australia (HIA) said.
In the winter edition of its National Outlook report card, the HIA confirmed conditions detioratated for the housing industry in the first half of 2012.
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The HIA is forecasting an 11.5 per cent decline in dwelling commencements in 2012, to a level of 133,420.
“HIA has noted for a considerable time the risk that new housing again revisits levels experienced as a result of the GFC,” said HIA chief economist, Dr Harley Dale.
“That situation now appears unavoidable, to the detriment of thousands of businesses and households, not to mention the overall domestic economy.”
“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,” said Dr Dale.
On a financial year basis, the report expects a modest recovery in 2012/13 and a further improvement in 2013/14.
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, the HIA added.
On a more positive note, the number of building approvals surged by more than 27 per cent on-month in May, according to the Australian Bureau of Statistics (ABS). This followed a fall of 7.6 per cent in the previous month.
