The March quarter Housing Industry of Australia (HIA) National Outlook report has revealed the increased costs of borrowing and building outlays has lead to a downturn in the construction of new dwellings, widening the gap between the number of new houses needed and the number of new houses actually being built.
HIA chief economist Harley Dale said it was improbable that the new home building cycle across Australian would turn up before 2009/10.
"Australia is enjoying its 17th year of economic expansion at the same time as the weakness in new home building looks set to last for an unprecedented five consecutive years," Mr Dale said.
New housing starts were forecast to be flat over the next 12 months, but policies should be introduced to make it rise sooner as the last positive building cycle ended in 2003/4, he said.
The fall in construction and subsequent shortage of new housing is driving rents up, while in contrast, record highs are being seen in the renovations sector.
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