Residential property falls damage national economy

“Last year’s cuts to the official cash rate and the freeing up of lending restrictions provided much-needed support to the wider domestic economy. Australia’s GDP grew by a stronger than expected 0.5 [of a percentage point] in the December 2019 quarter,” Ms Hopkins said.

Confirming expectations, figures released by the ABS today showed that declines in residential building detracted 0.2 of a percentage point from overall GDP growth. 

New home building activity fell by 4.1 per cent in the final quarter of 2019 while home renovation activity declined by 2.2 per cent. 

“The effect of these moves had not yet filtered through to the residential construction sector, which represented a drag on the economy in the December 2019 quarter,” she said.

“These results predate the onset of trade and travel restrictions between Australia and China. The restrictions represent a risk to the level of home building — through their effects on supply chains and also demand for new housing.”