Powered by momentummedia
nestegg logo
Powered by momentummedia
nestegg logo
nestegg logo

Invest

Decline in housing not expected for the next few years

By Sasha Karen · August 11 2017
Reading:
egg
egg
egg

Invest

Decline in housing not expected for the next few years

By Sasha Karen
August 11 2017
Reading:
egg
egg
egg
Housing Industry Association, HIA, Shane Garrett, housing numbers, housing market, property market, property investing,

Decline in housing not expected for the next few years

author image
By Sasha Karen · August 11 2017
Reading:
egg
egg
egg
Housing Industry Association, HIA, Shane Garrett, housing numbers, housing market, property market, property investing,

Though many agree a fall in housing numbers is on the cards for Australia, one economist anticipates those numbers will continue to grow in the near term.

Speaking at the Housing Industry Association’s (HIA) Industry Outlook forum, Shane Garrett, HIA senior economist, said that high volumes of housing will continue through to at least 2019.

The HIA’s recent Housing Outlook Report states 221,500 new dwellings in 2016-17, which is 4.5 per cent lower when compared with the previous year, and a further fall of 10.7 per cent is predicted for 2017-18.

Driving this fall is said to be multi-units, with new construction predicted to fall by 41 per cent during this time.

“Solid population growth, very low interest rates and consistent gains in employment do mask some concerning trends with respect to underemployment and decelerating GDP growth,” Mr Garrett said.

Advertisement
Advertisement

“Combined with another layer of obstacles to foreign investor participation in the housing market, new home building volumes are set to move downwards over the next couple of years.

“Having achieved record levels early in 2016, new home building starts are clearly in a downward cycle.

Mr Garrett said this downward cycle is different than previous cycles, as the bottom, predicted for 2019, will be higher than the peak of the last boom in 2010 and the peak in 2015-16, which “dwarfed all previous peaks,” resulted in a backlog that means the construction industry will still be building houses into at least 2018.

“The housing boom was not consistent across Australia and now, with NSW and Victoria cooling, all indicators are that the market is well past its 2016 peak when over 231,000 new homes were commenced,” he said.

“Even though new dwelling starts will decline over the next couple of years, the annual volume of new home starts is not likely to fall below 170,000 at any stage. By any standard, this is still a very elevated level of activity.

“The investor side of the market has also been hit by tighter lending finance due to APRA’s recent restrictions on interest-only mortgages.”

Decline in housing not expected for the next few years
Housing Industry Association, HIA, Shane Garrett, housing numbers, housing market, property market, property investing,
nestegg logo

Forward this article to a friend. Follow us on Linkedin. Join us on Facebook. Find us on Twitter for the latest updates
Rate the article

Join the nestegg community

We Translate Complicated Financial Jargon Into Easy-To-Understand Information For Australians

Your email address will be shared with nestegg and subject to our Privacy Policy

Why we’ll keep delivering for our communities in the face of COVID-19

alex

As Australia tries to keep pace with a rapidly changing business and social landscape in the wake of COVID-19, Momentum Media is leading the way delivering essential content to our communities, writes Alex Whitlock, director of Nest Egg.

Read more

From the web

Recommended by Spike Native Network

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.