Construction of new homes set to bottom out by the end of the decade

By |
The construction of new homes will take a significant fall over the 2015/16 financial year according to the latest figures from the Housing Industry Association.

Released yesterday, the HIA’s Winter 2015 National Outlook predicts overall construction levels will drop by 7% over 2015/16, with multi-unit developments to bear the brunt of the fall.

HIA senior economist Shane Garrett said the fall is set to occur despite the fact that current interest rates and migration are supporting high levels of construction, as inefficient taxation, planning and land release policies constrict new development opportunities.

“The effect of these supply bottlenecks will become apparent over the next 12 months, with the volume of new home building projected to decline by 7.0% during 2015/16,” Garrett said.

“During the upturn, multi-units accounted for an increasing proportion of new home building. Consequently, the multi-unit segment will see larger rates of decline over the coming years compared with the detached house segment,” he said.

A further fall in commencements of 8.6% is forecast for 2016/17.

According to the HIA, 2014/15 saw a total of 214,450 new dwelling commencements, the highest yearly total on record, but that peak is expected to become a trough over the next five years.

“HIA projects that new home building will bottom out at around 175,000 per year towards the end of the decade,” Garrett said.

“Critically, this falls short of Australia’s long term requirements and emphasises the importance of reform around taxation and housing supply policy.”

While construction levels are set to fall in coming years, the HIA is predicting an uptick in renovations through to 2018/19.

A 4.6% increase in renovations activity is forecast for 2015/16, followed by growth of 0.4% during 2016/17, that will be followed by growth of 2.4% in 2017/18 and 4.1% growth in 2018/19.

Do you have more than $200k in your super fund? You could use your super to buy property - Find out how

Top Suburbs : north epping , kariong , sth toowoomba , alexandria , nightcliff

go back

Get help with your investment property

Do you need help finding the right loan for your investment?

When investing in property, it is important to make sure that you not only have the lowest available rate that you can get, but also have the correct loan features for your needs.

Just fill in a few details below and we'll then arrange for a local Aussie Mortgage Broker to contact you and work out what features or types of loans are right for your needs. We'll even help with the paperwork. Plus and appointment is free.

How soon would you like a mortgage?
What is your Annual Household Income i $
Do you currently own any Investment Properties?
Do you own your own residence?
How much equity do you have in all your current properties?
First Name
Last Name
Where do you live?
What number can we reach you on?
E-mail address
We value your privacy and treat all your information seriously - you can check out our privacy policy here