Home building activity in Australia continues to slide, adding more pain to the slowing economy. There has been a significant fall in approvals for both private sector housing and non-house building. Following a dramatic drop in May, June also recorded a 0.7% fall in building approvals. Approvals are now 7.8% lower over the year.
A shortfall of about 50,000 homes is estimated by the Federal Treasury for the 2009-10 period, due to the number of new homes built not matching the increase in demand.
According to a BIS Shrapnel survey released today, there are no notable improvements forecast until at least 2009.
BIS Shrapnel conduct regular building activity forecast reports, and this report titled Building in Australia, 2008 to 2023, predicts a 3% rise in new dwelling construction in 2008/09, offset by a 2% fall in non-dwelling building commencements.
"In 2007/08, the value of new dwelling construction remained below the last peak in 2003/04. Housing construction has been weighed down by the strength of business investment. For the first time ever, the national value of new housing construction in 2007/08 was exceeded by the value of private sector investment in engineering construction projects. This outcome represents a pronounced changing in gears for the Australian economy.
The economy overall is being affected by the housing crisis. Investment and expansion is at risk of slowing as businesses call for more workers, only to find it increasingly difficult to accommodate the additional workers.
Join the discussion on all Non-Bank Lenders
|