The Housing Industry Association’s (HIA) economic group has released its latest forecasts showing Australia is in the middle of a recovery in new home building.
The fact that the HIA economists have revised upwards forecasts for residential building activity gives further weight to signs the economy is transitioning from the mining investment boom to a non-resources led one:
- 180,000 dwelling commencements across the country in 2014, an annual increase of 8.2% on 2013 levels.
- Beyond 2014 activity is expected to remain at elevated levels relative to recent history, however sustaining the high level of activity we now expect to see in 2014 appears unlikely.
- After reaching decade lows in 2013, renovations activity is forecast to lift by around 8.2% in 2014.
New South Wales and Western Australia have driven the new home building recovery, according to the HIA Housing Forecast Update.
“The impetus behind the recent strong growth in NSW and WA is likely to remain, although this will only be sufficient to hold activity at elevated levels rather than drive further fast growth in the face of capacity constraints.
“The high level of building observed nationally in 2013 could not have been achieved without such a strong contribution from Victoria, driven by healthy numbers of multi-unit dwellings.
“We maintain our view that the elevated level of new home building in Victoria, driven by the multi-unit segment, is likely to transform into a potential point of weakness over the near term, although to a lesser extent than our previous forecast
The latest forecasts:
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