Login
ISCOVER
Staff Reporter
The Housing Industry Association is calling on the Reserve Bank of Australia to cut the official cash rate again as housing starts fall below levels recorded during the height of the GFC.
To continue reading the rest of this article, please log in.
Looking for more benefits? Become a Premium Member.
Create free account to get unlimited news articles and more!
Looking for more benefits? Become a Premium Member.
According to the HIA, the housing industry will continue to deteriorate over the remainder of 2012, as housing starts are now expected to fall by 11.5 per cent over the calendar year.
“HIA has noted for a considerable time the risk that new housing again revisits levels experienced as a result of the GFC,” HIA chief economist Harley Dale said.
“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.”
To improve the conditions facing new home building, Mr Harley said the Reserve Bank needs to cut the cash rate and the Commonwealth and state governments need to take immediate action to boost confidence.
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.
