A national industry association has said that Australia’s housing market is approaching its peak, but we won’t see the other side for at least a year.
“The latest housing finance statistics are further evidence that building activity in Australia’s housing market is approaching a peak with the number of housing commitments flat, recording a small increase of 0.9 per cent on the previous month,” said Matthew Pollock, Master Builders Australia’s national manager – housing.
“However, that peak is unlikely to come before the end of the financial year and the current pipeline of work is set to support one of the best years for home building activity in Australia’s history in 2017,” said Mr Pollock.
Mr Pollock went on to say that this forewarning could enable the future downturn of the housing market to be well managed and therefore less devastating than other experts have been predicting.
“That leaves the possibility for a softer landing later down the track, with housing finance commitments and building approvals data likely to show emerging signs of weakness during the first half of 2017. But managed well, and combined with an expectation for high and sustained population growth, the housing market will continue to be a pillar of Australian economic prosperity and jobs growth over the long term,” said Mr Pollock.
NSW and Victoria are leading the new housing commitment race, NSW alone accounted for 30 per cent of all housing finance commitments in Australia in November 2016; combined with Victoria’s numbers the pair account for almost two-thirds of all new housing commitments in Australia for the month.
Other states tell a different story, numbers in Western Australia have been falling for four months, resulting in the current numbers being 9 per cent lower than November 2015.
South Australia, Tasmania and the ACT are also experiencing either falling or flat new housing commitments, these states are expected to see a weaker house building period over the next 12 months according to Mr Pollock.
“In Queensland, the story is very much regional, with the housing markets in Brisbane and the Gold Coast in a boom period, while the collapse of resources-related construction in the Darling Downs, Fitzroy and Mackay is causing some excess capacity to emerge in those markets, which will need to be filled for housing construction to pick up again,” said Mr Pollock.
“Despite a record home-building effort in 2016, expectations for high population growth in 2017, particularly in our major cities, will mean new home building will need to continue to meet future growing demand,” he said.