New home building in Australia is forecast to reach a 10-year high this year, according to the latest Housing Industry Association (HIA) National Outlook.
“Residential construction is making a vital contribution to the re-balancing of growth in the nation’s economy,” says HIA chief economist Harley Dale.
New dwelling starts are forecast to increase by 7.1% in 2014 to a peak of 180,000, following growth of 10.9% in 2013. Activity is forecast to decline in 2015 and 2016 to a level just under 170,000.
Construction is the sector economists are looking towards most intensely as the area that will pick up the slack in the Australian economy coming from a slowdown in mining activity.
A level of almost 180,000 in 2013-14 (and in calendar year 2014) would be second only to the 187,000 dwellings started back in 1994.
And after dropping to decade lows in 2013 there is huge upside potential for renovations activity, Harley Dale says.
“Two consecutive quarters of growth through to March 2014 provides confidence for our forecast of 1% growth in the total value of renovations investment in 2013/14,” he says.
“Momentum in renovations activity is forecast to build in coming years with growth of 1.2%, 2.3% and 2.5% over the three years to 2016/17. This profile would see investment exceed $30 billion for the first time since 2011/12.”