New home building activity has hit a 10 year low, new figures have revealed.
According to data from the Australian Bureau of Statistics, new residential building work done fell by 3.1 per cent in the June quarter.
Detached housing, a key persistent source of weakness for the Australian economy, fell by 3.6 per cent, while work done on ‘other dwellings’ fell by 2.0 per cent.
Housing Industry Association chief economist Harley Dale said that a fifth consecutive decline in residential building work done in the June 2012 quarter was steeper than initially thought.
“Interest rate cuts are helpful in hopefully turning around residential construction from the parlous state evident in mid 2012. However, the efficacy of easier monetary policy is considerably diluted by the historically high and excessive margin between the official cash rate on the one hand and mortgage and business loan rates on the other,” Mr Dale said.
“Federal and state governments need to view today’s update on Australia’s residential construction industry as a signal they are failing to adequately invest in and reform new housing supply.
“Today’s update makes a mockery of recent scuttlebutt suggesting negative gearing arrangements need to be diluted or removed.”