The residential construction industry will see out another healthy year in 2015-16, according to the Housing Industry Association (HIA).
Among the key points in the association’s recently released outlook for new home building and renovations activity, the HIA said a strong pipeline of approved activity will sustain a historically high level of new dwelling commencements throughout 2015-16.
“This will be a very good result not only for the new home building sector but for the broader economy,” it said.
“Approvals have been outpacing commencements for much of the current cycle. This has resulted in a sizable backlog of dwellings that have been approved but have not yet commenced construction. This backlog totalled over 35,000 at the end of June.”
The HIA said the contraction in detached dwelling commencements is forecast to be moderate beyond 2015-16 compared to the multi-unit segment.
The outlook also noted that while Australia’s renovations market saw considerable decline of almost 30 per cent between 2011 and 2013, a subsequent modest recovery is forecast to continue.
“The recovery in renovations activity will be helped by the ageing of the dwelling stock across Australia over the rest of the decade,” it said. “This is the result of relatively high levels of house building during the late 1990s and early 2000s.”
HIA chief economist Harley Dale said that from 2016-17 onwards the industry risks a relatively sharp decline from record levels, “highlighting the timeliness of renewing a focus on meaningful housing policy reforms”.
[Related: Building approvals improve in September]
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