Home-building recovery to stall in 2011, says HIA

(The Australian 28 June 2010)

The Housing Industry Association, which represents home-builders, said housing starts are likely to fall 3 per cent in 2011, reversing part of the expected 20 per cent rise in 2010.

The latest data shows that the industry will continue to build homes at a rate far below demand.

In its quarterly National Outlook Report, the HIA said Australia needed to build more than 190,000 dwellings in 2010 alone to meet underlying demand. Current estimates put total building at 165,940 houses.

Harley Dale, the chief economist at HIA, said that over the next 10 years, Australia would need to build 420,000 dwellings more than what were built over the last decade.

“A failure to build sufficient homes is placing huge pressure on rental markets and is making it very difficult for younger Australians who aspire to home-ownership to achieve that goal,” Mr Dale said in a statement that accompanied the report.

Empirical data, observations on the ground, and the slow progress in reducing supply-side obstacles all currently point to the first increase in housing starts in eight years in 2010, which would revert back to a decline in starts in 2011, Mr Dale added.

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