The construction of residential properties in the latter half of 2017 defied expectations of softening activity, with the Housing Institute of Australia predicting that the best is yet to come.
According to Geordan Murray, HIA senior economist, the release of the Australian Bureau of Statistic’s September 2017 quarter building activity and November 2017 housing finance figures point to residential construction holding up in the second half of 2017.
“During the year, there were some concerns about activity softening, but the figures confirm that we finished 2017 on a solid footing,” Mr Murray said.
“New figures released today show a slight increase (0.7 per cent) in the number of housing starts during the September 2017 quarter, although this was still around 3.3 per cent down from the level recorded a year earlier.
“A resurgent multi-unit sector drove the lift in starts, with activity increasing by 5.3 per cent in the September 2017 quarter. Detached house starts declined by 3.4 per cent during the quarter but remain at relatively healthy levels.”
Mr Murray predicted building activity to maintain its high levels throughout 2018 due to leading indicators of future activity, recent building approvals data and the housing finance figures, as these data points show that there is still demand for housing.
“The number of new loans to owner-occupiers building or purchasing new homes continued to increase in November,” Mr Murray said.
“Lending for new homes during November increased by 2.2 per cent on the prior month, and the total number of loans during the three months to November 2017 was 12.4 per cent higher than the same time a year earlier.
“Despite the strong end to 2017, there is little doubt that the housing cycle has passed the peak. But with strong levels of population growth, a strengthening labour market and interest rates predicted to remain at historically low levels for some time yet, 2018 could still be stronger than many analysts expect.”
[Related: ‘No evidence’ of housing oversupply: HIA]