Home building up 9.4%: Bah Humbug from the HIA

By Terry Ryder, 17th December 2009

The number of new homes started in Australia rose 9.4% in the September Quarter, the first growth in home building in a year. That’s a good thing, right?

Well, no, not if the media can find a way to turn it into a negative, aided by the most pessimistic body of people in the nation, the Housing Industry Association.

The Bureau of Statistics reports that the total number of new homes commenced rose 9.4%, seasonally-adjusted, in the September Quarter. The rise was most pronounced in New South Wales, the ACT, Tasmania and the Northern Territory.

The increase included an 8.1% seasonally-adjusted rise in new houses, while townhouses and apartments increased 9.0% (the first growth in that sector since the March Quarter 2008).

Here’s how one media organisation reported it: “This long-awaited recovery is already being threatened by emerging labour and land shortages. So far, it has by-passed Victoria, Queensland, South Australia and Western Australia. And the Housing Industry Association says that, even with the surge, the current rate of 136,328 starts a year is falling well short of the nation’s population growth.”

We can always rely on the HIA to take a positive set of numbers and turn it into a whinge about the economy, the state government, the federal government, the local council and the world at large.

Here’s how the HIA’s senior economist Ben Phillips reacted. He said the latest surge had followed two consecutive quarters of decline. He discounted the increase as being unreal because it had been artificially boosted by government incentives and low interest rates. He said “substantial supply-side obstacles are starting to re-appear”, including labour and land supply shortages.

You get the feeling Ben is a glass half empty sort of guy. He’s got an early Christmas present but he’s grizzling because he doesn’t like the wrapping paper.

Robert Harding from the HIA in South Australia got in on the act, urging caution in assessing the figures. "I wouldn't get too excited about that because we're still significantly down on what we were doing last year and probably we think that the uptick in September was probably brought about to some extent by the stimulus package," he says.

Robert is more of a glass completely empty kind of person.