Confirming an ongoing easing of conditions within the housing industry, new home starts fell in the September 2005 quarter, largely as a result of a pull-back in apartment starts.
According to figures released this week, new home starts fell by 5 per cent to 38,035, bringing the year-to-September 2005 figure to 154,856, some 9.2 per cent down on the twelve months to September 2004. Detached house starts fell by 2.2 per cent to 26,252 following a strong June quarter. Multi-unit starts dropped by 12.1 per cent to 11,201.
Chief Economist with building industry body, HIA, Simon Tennent said that housing starts would be lower in 2005/06 than was the case last year, although the considerable amount of work in the pipeline will ensure only a moderate down cycle.
"Building approvals, new home sales, and new housing finance all suggest a bottom has yet to be found for housing starts", he added.
"Nevertheless, as we progress through 2006 housing starts will stabilise rather than go into free fall and that is good news for our industry."
"Starts are currently at a level below the underlying demand for housing of around 160,000 starts per annum and 2006/07 should see the start of a gradual recovery."
"However, affordability is still very low and precious little seems to be happening in addressing this major problem. If the status quo holds and nothing tangible is done to address the significant structural costs of home building, then the next recovery in housing will be far more muted than it needs to be or should be", Mr. Tennent said.
"Needless to stay, any further rises in interest rates would hardly be a positive tonic for housing affordability", he added.
On a state by state basis, the number of housing starts fell in four states - down by 37.1 per cent in the ACT, 11.4 per cent in New South Wales, 9.5 per cent in South Australia, and 0.3 per cent in Queensland. On the other hand, starts increased in the Northern Territory (by 1.6 per cent), in both Victoria and Western Australia (by 0.3 per cent) and by 0.2 per cent in Tasmania.
