- Stable and reliable growth in population is necessary to ensure economic growth: HIA
- HIA expects the boom of new detached housing to last until at least next year
- A decline in new commencements expected if population growth remains lows
With Australia in the middle of a building amid record levels of detached homes under construction, a return of stable and reliable growth in population is necessary to ensure economic growth, said Housing Industry Association’s (HIA) economist, Angela Lillicrap.
The HIA, who recently released their economic and industry Outlook Report for Australia, said the boom is expected to continue well into 2022 and will support employment across the sector.
“This record volume of new detached homes under construction is occurring in all regions and is continuing to expand,” said Ms Lillicrap.
“The elevated level of building and the speed that it emerged has resulted in demand for key building inputs outstripping supply, including materials, labour and land.”
Angela Lillicrap, HIA
“The delay in the supply of materials will see the impact on labour and ancillary services remain elevated well into the second half of 2022. This is a positive for the wider economy as the economic stimulus is spread over more years, but a challenge for building businesses,” she said.
Houses vs Other Dwelling Commencements
Ms Lilicrap referred to recent data that suggested without fiscal stimulus, demand for detached housing will remain solid. Other dwellings are presently not witnessing growth compared to detached housing.
Due to elevated savings and increase time spent at home, the HIA also expects the renovations market – currently mid-way through a record year – to continue to its strong growth.
However, she warned that due to lack of migration and population growth, the growth in new housing is unlikely to be maintained.
“Despite the strong outlook for the next twelve months, without a return of demand for new housing from overseas migration, there will be a decline in new home commencements over the next few years.
“Even with overseas migration re-starting next year, the volume of new home commencements will not be sustained.
“A decline in commencements of new homes should be anticipated from mid-2022 when homes initiated by HomeBuilder are reaching completion,” concluded Ms Lillicrap.