Record amount of supply entering market
Australia is set to build a record number of homes this financial year – and almost 35 per cent more than three years earlier.
The Housing Industry Association has forecast Australia will build 195,900 new homes in 2014/2015.
That would be a 7.7 per cent increase on the 181,900 homes that were built in 2013/2014 and a 34.8 per cent jump on the 145,300 homes that were built in 2011/2012.
Numbers then increased 11.5 per cent to 162,000 in 2012/2013 and then rose another 12.3 per cent to 181,900 in 2013/2014.
However, building activity is expected to fall in the years ahead.
The forecast for 2015/2016 is for 184,700 homes to be built, which would mark a 5.7 per cent fall on the 2014/2015 forecast.
Homebuilding activity is then forecast to fall another 4.2 per cent to 176,900 in 2016/2017.
HIA chief economist Harley Dale said residential construction is the success story of the domestic economy, although wide geographical divergences are still evident.
“Imagine how weak the Australian economy would be without new housing and its economic multiplier benefits,” Mr Dale said.
“We need to build on the lofty heights being achieved this new housing cycle and ensure that supply in coming years meets the requirements of a growing and ageing population.”