The prospect of an improvement in dwelling supply now appears further away than ever as builder sentiment plunged in the June quarter.
The Master Builders Building and Construction Index fell below 50 for the first time in four years, Master Builders said today.
A reading of below 50 indicates that builders expect a decline in building and construction activity.
Peter Jones, Master Builders chief economist, said the survey was historically a good indication of the outlook for construction and in this case the future was not “rosy”.
Deteriorating affordability and tight financial conditions were some of the concerns expressed by builders.
Mr Jones said weakened profitability for builders was also a concern – not just for builders, but investment and employment as well.
He said an overwhelming majority of builders expect labour and material costs to escalate significantly in the next six months.
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