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ISCOVER
Staff Reporter
The Housing Industry Association (HIA) is calling on the government to implement some much needed reforms in a bid to stimulate the residential building industry.
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According to the HIA, yesterday’s GDP figures show some upturn in the residential construction industry, but further policy action is required to ensure a sustainable new home building recovery.
“GDP grew by 0.6 per cent in the final quarter of 2012, an increase of 3.1 per cent on the previous December quarter. This is quite a robust aggregate outcome within which the contribution from residential construction is insufficient and underwhelming,” HIA senior economist Shane Garrett said.
“Private new dwelling construction saw a 3.4 per cent uplift in the quarter which is an encouraging rate of growth. It’s no coincidence that this result follows interest rate reductions in late 2011 and mid-2012, and of course we had two RBA rate reductions in the December 2012 quarter. This demonstrates the crucial role of interest rate cuts in helping to pick the housing industry up off the floor,”
According to Mr Garrett, the increase in new dwelling investment signals, at best, a pulse of recovery well short of what the RBA and the Australian economy requires from new home building.
“Furthermore, the continued weakness of the alterations and additions segment of residential construction is apparent in the latest figures,” he said.
“Activity in renovations was practically static and is 8 per cent lower than one year earlier. This is proof of the nervousness which continues to weigh on households.
“In the absence of significant growth across all sectors of the industry, it is still too early to declare an end to the housing weakness. Further interest rate reductions by the RBA are warranted. However,it remains the case that policy action from governments is a prerequisite for residential construction activity reaching levels commensurate with an acceptable growth rate for the Australian economy in 2013.”
