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{{propApi.successMessage}} {{region}} Change locationSupply of new homes set to slow further
Supply of new homes set to slow further
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HIA released its economic and industry Outlook report today. The report includes updated forecasts for new home building and renovations activity nationally and for each of the eight states and territories.
“There has been a rapid slowdown in the volume of new building projects entering the pipeline, especially new apartments, over the past year,” added Mr Reardon.
“The sharp increase in the cash rate has compounded the barriers created by extraordinary restrictions on lending and investing, increased construction costs and regulatory costs.
“The rise in the cash rate is the key reason for the slowdown in the number of new homes commencing construction. There are long lags in this cycle and the full impact of the increases to date will not be apparent, until late 2024.
“Leading indicators of home building activity have fallen to exceptionally low levels. New home sales are almost 50 per cent lower than a year ago. Lending for the purchase or construction of a new home has fallen to its lowest level since 2008.
“The slowdown in the commencement of new homes is counter to the goal of increasing supply and delivering one million homes over the next five years.
“Beyond the rise in the cash rate, the supply of new homes is also constrained by a range of regulatory and cyclical challenges. The Government’s Housing Australia’s Future Fund isn’t a solution to all of these problems, but it is a necessary step toward improving the supply of new homes.
“Removing barriers to investment, reforming local council planning processes and stable economic settings are also necessary steps,” concluded Mr Reardon.
HIA Forecast - Australia
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New home sales remain at near three-year high
“The cycle of ongoing growth in new home sales was broken in July, with a 6.4 per cent fall compared to June,” stated HIA Senior Economist, Maurice Tapang.
Roundtable must declare a battle on red, white and green tape
“If the Economic Reform Roundtable is serious about developing meaningful and lasting change to boost productivity and the economy, then the number one priority must be on cutting the excessive regulation that is crippling businesses,” said HIA Managing Director, Jocelyn Martin.
Investors vital to increasing housing supply
“Investors were responsible for 41 per cent of new homes financed for construction in the past year,” stated HIA’s Chief Economist, Tim Reardon.
Home building gaining momentum
“The RBA delivered the third rate cut of this easing cycle, bringing their benchmark cash rate down from 3.85 per cent to 3.6 per cent,” stated HIA Senior Economist Tom Devitt.