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07/02/2007
Australia’s most comprehensive housing report card highlights a slow recovery in 2007 as the industry fights against the headwinds of very low affordability, reports the Housing Industry Association (HIA)...
Commenting today on the release of the December 2006 quarter HIA National Outlook publication, HIA Chief Economist, Mr Harley Dale, said that the crisis in housing affordability would mean a lower level of residential activity in 2006/07.
“New building activity will be softer this year but a recovery should slowly emerge over 2007/08,” Dale said. “A stable interest rate environment in 2007 will create the platform for a gradual improvement in housing conditions as we move through the year.”
Dale continued, “The gap between the cost of new housing and what medium and low income households can afford to pay is wider than ever. Stable interest rates won’t bridge that gap, only government action will,” Mr Dale added.
New South Wales hit by double whammy of high land prices and drought
Dale expressed concern for the health of the New South Wales housing market. He commented, “The risk is for a sharper decline as New South Wales is yet to show a sustained recovery in building as high land prices hurt Sydney and as the drought weighs down on regional building activity.”
Dale concluded, “Starts are forecast to grow by 3 per cent in 2007/08 and by a further 6 per cent in 2008/09, within which the stark differences evident across states in recent years will remain. Over 2007/08 starts are forecast to rise by 6 per cent in NSW, from an extremely low base, but fall by 13 per cent in Western Australia.”
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