HIA more bullish on housing starts

More than 30,000 homes will commence construction in the current financial year, according to the Housing Industry Association’s latest forecast, but its predictions for the next few years exceed those made by the state government’s residential building forecasting body.

The HIA said it expected building to start on 30,570 homes in WA in 2014-15, before slipping to 25,550 in 2015-16 and further to 23,850 in 2016-17.

The forecasts were more bullish than those released earlier this month by the state government-backed Housing Industry Forecasting Group, which also predicted starts of around 30,000 in the current financial year.

But the HIFG forecast dwelling starts to fall to 23,000 in 2015-16, bottoming out at 20,000 in 2016-17, before rebounding to around 22,000 in 2017-18.

Across all states and territories, the HIA is predicting significant falls from the record-highs of housing construction in Australia, which are tipped to break through 200,000 in the current financial year.

The previous record for a cyclical peak was 187,000 starts, in 1994.

In Victoria, housing starts are expected to fall by 16.5 per cent in 2015-16, while new home starts in NSW are predicted to dip by 9.1 per cent.

Queensland is the only state which has been predicted to be largely steady, at 0.8 per cent.

The HIA said most of the upwards momentum in new home construction was being driven by apartments, with the detached housing construction cycle appearing to have already peaked, at more than 112,000 dwellings, 8 per cent over the long term average.

However that number is below market demand, the HIA said.

“A lack of shovel ready land, among a number of constraints, is leaving a significant cohort of potential new home buyers of detached housing out in the cold,” the HIA said.