Residential outlook strong but shortage remains

Residential outlook strong – but shortage remainsThe Australian Residential Development Outlook released today indicates strength and stability in Australia’s residential development industry which is forecast to continue into 2015-16, but activity still stops short of meeting Australia’s housing needs.The RP Data, Residential Development Council’s Australian Residential Development Outlook for the spring reporting season highlights a bullish residential construction sector. Housing construction is underpinning Australia’s economy, with starts likely to be 30,000 up on previous forecasts for this year alone.”The good news is that the forecasts for F2015 show residential development reaching 180,000 new starts, which adds tens of thousands of homes for Australian families than on previous years.” Executive Director for Residential Development, Nick Proud, said.”On average, Australia builds 1,000 homes each year, but this is simply not enough to meet demand, let alone reduce the housing shortage.”These increased construction rates are expected to continue for the next 12-18 months – but the challenge is to keep up this level of activity to meet undersupply,” said Mr Proud.Tim Lawless, National Research Director of RP Data says “residential development activity has long been the litmus test for the economy and strong dwelling starts and sales indicators are showing positives signs into F2015.”Beyond current dwelling activity, we do see some of the inputs that include continued house price growth, demand for housing credit and lending finance that will feed into activity over the next 18 months.”Factors such as rising unemployment rates and falling terms of trade could lead to a drop off in the number of new starts from 2016 and this would not only worsen housing affordability, but put greater pressure on state budgets around the country,” said Mr Lawless.”Removing policy roadblocks, like planning systems delays and stamp duty costs, are essential to maintaining higher construction rates, offsetting changes to outlook indicators and improving affordable building into the longer term,” said Mr Proud.”State governments need to drive policy changes that will support the residential development industry, which in turn supports their budgets” Mr Proud concluded.Media contact:Nick Proud, Residential Development Council – 0408 538 126Mitch Koper, RP Data – (07) 3114 9999