The new home building cycle is unlikely to see any significant upturn until 2009/10, the Housing Institute of Australia (HIA) forecasted in its National Outlook, released yesterday.
According to the HIA, higher interest rates and construction costs will continue to fuel a widening gap between the level of new housing required and the volume of new stock actually being built.
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HIA chief economist Harley Dale said the chronic shortage of housing stock was generating a real social problem and that policies “need to translate into activity on building sites, in a matter of months, not a matter of years.”
The association forecasts that rate hikes will see a moderate cooling in existing house prices, however the ongoing shortage of housing stock is expected to help maintain values.
Published: 29-04-08