Preliminary ABS figures indicate the recovery in residential construction activity faltered slightly in early 2013, according to the Housing Industry Association (HIA). Source: Timberbiz
“… the volume of residential construction declined by 1% in the first quarter of 2013. This was comprised of a 0.5% reduction in new dwelling volumes as well as a 4% fall in renovation volumes during the quarter,” said HIA senior economist Shane Garrett.
“The slight fall in building activity in the first quarter of 2013 is at odds with the generally improving conditions over previous quarters.
“In spite of today’s disappointing figures, we continue to believe that housing activity is in recovery mode.
“The fact that residential activity has faltered shows that there is no room for complacency. However, this is a delicate recovery and policy settings need to be as supportive as possible to ensure that it is sustained,” said Garrett.
When compared with 12 months ago, the picture is a little more encouraging. Residential building activity rose by 2.1%, with particularly strong growth of 4.1% in work done on new dwellings.
According to the HIA renovations activity continued to deteriorate with an annual decline of 8.9% in the first quarter of 2013 and this dismal performance is due to lenders not releasing home equity financing.
The HIA said that the number of residential building approvals posted an encouraging bounce back in April.
“Following a disappointing 5.5% dip in March, the number of seasonally adjusted residential building approvals increased by 9.1% in April 2013,” said HIA chief economist, Dr Harley Dale.
“The rebound in April was broad-based, reflecting an increased number of approvals in six of eight states and territories, Queensland and the Australian Capital Territory proving the exceptions,” he said.
“Over the three months to April 2013 approvals were up everywhere except New South Wales and Victoria.”
“In 2012 we had four out of eight new home building markets in Australia in recession. It is nevertheless vital to be seeing some signs of improvement – approvals suggest an increase in housing starts in the current fiscal year in the order of 7%, which is HIA’s forecast.”
In April 2013, total seasonally adjusted building approvals increased by 33.3% in New South Wales, in Victoria by 9.3%, South Australia up 8.0%, Western Australia up 4.3% and Tasmania 36.5%.
Building approvals fell by 10.9% in Queensland. In trend terms building approvals increased by 8.6% in the Northern Territory in April, but declined by 2.1% in the ACT.
