The new home building cycle is unlikely to see any significant upturn until 2009/10, the Housing Institute of Australia (HIA) forecasted in its National Outlook, released yesterday.
According to the HIA, higher interest rates and construction costs will continue to fuel a widening gap between the level of new housing required and the volume of new stock actually being built.
HIA chief economist Harley Dale said the chronic shortage of housing stock was generating a real social problem and that policies “need to translate into activity on building sites, in a matter of months, not a matter of years.”
The association forecasts that rate hikes will see a moderate cooling in existing house prices, however the ongoing shortage of housing stock is expected to help maintain values.
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