Current at: 28 April 2008
The most comprehensive report card on the residential sector in
Queensland
highlights a pause in new home building activity reflective of sharply higher borrowing costs, labour rates, and building materials prices.
The new home building sector in
Queensland
has been very strong for some time, but the rate of growth is unsustainable in the short term.
Commenting today on the release of the March 2008 quarter HIA Queensland State Outlook publication, HIA Executive Director,
Queensland
, Mr Warwick Temby, said that the new home building cycle was likely to take a pause in 2008/09.
“New dwelling starts are forecast to increase by 6 per cent in 2007/08 but remain steady next financial year,” Mr Temby said.
“Despite the
Queensland
residential sector out-performing
Australia
over the last two years, the lack of sufficient new housing supply is driving up rents, and is holding up real estate prices for existing housing stock,” Mr Temby said.
“Right now, the shortage of housing stock is generating a real social problem via a dislocating impact on lower income households. Policies on the table need to translate into activity on building sites, in a matter of months not a matter of years,” said Mr Temby.
Meanwhile the renovations sector in
Queensland
has also been stronger than the situation apparent for the nation as a whole.
“Total investment in renovations grew by 13 per cent in 2006/07, the fastest pace in
Australia
, and is expected to hold at the record level of $7.6 billion in 2007/08,” Mr Temby said.
“Renovations activity is forecast to increase by 3 per cent in 2008/09.”
“In part, the health of the renovations sector is fuelled by astronomical transaction charges on property coupled with taxes and charges on new residential dwellings,” added Mr Temby.
A shortage of housing stock will maintain house prices.
“Talk of widespread falls in house prices is way off the mark,” Mr Temby said.