Housing growth not fast enough for economy

Housing activity is growing, but not fast enough to contribute to broader economic growth, according to the latest ABS statistics.

HIA economist Diwa Hopkins said the improvement is “encouraging”.

"However, it was insufficient to contribute to broader economic growth. Rising public sector investment and net exports were the largest contributors to GDP growth in the September quarter,” said Hopkins. 

“Most indicators are signalling improved conditions for new home building. The key will be to observe residential construction make positive contributions to growth in coming quarters as mining investment eases.

“The headline result for the September 2013 quarter was 0.6% GDP growth over the quarter and 2.3% growth on an annual basis, a result slightly below expectations.

“Following a disappointing performance in the June quarter, new dwelling expenditure posted a modest rise of 0.2% over the September quarter. Compared with 12 months ago, new dwelling expenditure is 4.6%.”

Meanwhile, expenditure on alterations and additions posted a weak result, declining by 1.5% over the quarter. The latest volume of activity currently remains around a decade low. This poor quarterly result brought total dwelling investment down by 0.5% over the quarter to a level that is 1.7% higher than in September 2012 quarter.

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