Housing construction set to rise
The residential construction sector recovery is well underway and should continue into the coming year, according to predictions from the Housing Industry Association (HIA).
“The improving level of dwelling commencements achieved in 2012/2013 will be consolidated this year before moving up a further leg in 2014/2015,” HIA senior economist Shane Garrett said.
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The association’s quarterly National Outlook shows the revival of the residential construction industry since its trough in 2011.
In 2011/2012, detached housing commencements declined in all states except the Northern Territory, while five out of eight states declined in 2012/2013.
In the coming year, only Victoria, Tasmania and the Northern Territory are set to decrease their level of new housing starts.
According to the report, Queensland is set to be the strongest contributor to the sector’s rise.
The data suggests New South Wales and Western Australia will maintain current high levels of housing starts into the next year, with an annual increase of 11.1 per cent for NSW and 8.5 per cent for WA.
“Growth in housing starts during 2013/2014 will be concentrated in large states like NSW, Queensland and WA,” Mr Garrett said.
The unit sector is facing mixed results in the coming year.
Strong growth is expected in NSW and WA, with more modest improvements in Queensland and South Australia.
However, steep drops elsewhere in the country mean the unit sector overall is facing a decline.
“Multi-unit commencements are forecast to contract in Tasmania, the NT and the ACT. However, a substantial contraction in Victoria is expected to be the determining factor in this dynamic,” the report stated.
Multi-unit dwelling commencements will drop nationally by 5.5 per cent in 2013/2014 and continue this poor performance into 2015.
Nonetheless, the report is optimistic that multi-unit dwellings are a growing market segment.
“Despite the forecast for a string of declines, we maintain the view that multi-unit dwellings are likely to become an increasing share of new home commencements over time,” the report stated.