Perennial pessimists predict recovery!

Posted on 29/05/2009  

The Housing Industry Association, in a rare moment of optimism, has predicted a recovery in housing construction in the second half of this year.

The HIA National Outlook, a quarterly report card on the residential construction sector, signals a recovery for the housing industry from mid-2009, thanks to fiscal stimulus and interest rate reductions.

“The First Home Owner Boost, the lowest mortgage rates since the late 1960s and the housing components of the Federal Government’s Nation Building and Jobs Plan will combine to generate a moderate recovery in residential activity,” says HIA chief economist Harley Dale, in the closest thing to a positive statement from Dale and his cohorts in years.

The number of housing starts for 2008-09 is expected to fall 17% to 132,000, before growing 11% over the following two years.

The renovations sector is holding up well also, the HIA says. “Following a steady 2008-09 we are forecasting an increase in total renovations investment of 6% over 2009-10 and 2010-11,” Dale says. “Renovations activity hit a record worth of nearly $31 billion in 2007-08 and our forecast is for the value to be well on the way to $33 billion in 2010-11.”

But it wouldn’t be the HIA without a whinge. It has its usual grizzle about “the perennial obstacles of inadequate land supply, insufficient skilled labour, and excessive taxation”. There’s no mention of HIA members continuing to pump out big, expensive houses when the market is crying out for small, cheap ones.

ENDS

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