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ISCOVER
Staff Reporter
The Housing Industry Association of Australia (HIA) is calling on state and federal governments to start working in tandem with the Reserve Bank’s (RBA's) monetary policy settings in a bid to improve the prospects of a housing recovery in 2013.
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“The headline result of 0.47 per cent GDP growth in the September 2012 quarter and 3.1 per cent over the year was below expectation and provides no consolation for businesses or households,” HIA chief economist Harley Dale said.
New dwelling expenditure increased by 3.7 per cent over the September 2012 quarter, although the volume remained 1.9 per cent lower than in the September 2011 quarter.
The growth in the September 2012 quarter provided a 0.1 percentage point contribution to GDP growth.
According to Mr Dale, this is the first quarter since the March quarter of 2011 that new dwelling investment has made a positive contribution to GDP growth.
Meanwhile, expenditure on alterations and additions posted a fifth consecutive quarterly decline, recording a fall of 3.3 per cent, which took the volume of activity to its lowest level since June 2009 – coincidently, this was the quarter in which the official cash rate last fell to 3 per cent.
“While it is pleasing to see the investment in new home building make a positive contribution to growth, there is no escaping the fact that, in aggregate, housing investment has made a negligible contribution to economic growth in the September 2012 quarter,” Mr Dale said.
“If the residential construction sector is expected to fill the void left by receding mining investment, we not only need to see lending rates eased further, we also need sensible policy reforms that reduce the barriers to new housing being brought to market.”
“The federal government needs to urgently reconsider its race back to surplus. Contractionary fiscal policy at this juncture in the economic cycle is damaging the chances of a new home building recovery and a rebalancing of growth in the Australian economy from 2013.”
