Australia’s 2017 home building activities will go down as one of the best performing years in history with the peak likely to come before the end of the financial term, said Master Builders of Australia’s National Manager for Housing Matthew Pollock.
“This would leave the possibility for a softer landing later down the track, with housing finance commitments and building approvals data likely to show emerging signs of weakness during the first half of year,” Pollock said.
“But managed well, and combined with an expectation for high and sustained population growth, the housing market will continue to be a pillar of the Australian economic prosperity and jobs growth over the long term, with 2017 shaping up to be a particularly strong year for new home building activity,” he added.
New South Wales recorded 16,428 new housing finance commitments in November 2016 and had accounted for 30 percent of all housing finance commitments in Australia over the period. While, Victorian housing finance also performed well, recording 14,949 new housing commitments in November 2016.
“Combined, the two accounted for close to two-thirds of all new housing commitments in Australia over the month,” he said.
However, there were slight concerns in Western Australia the number of new housing commitments had fallen for four consecutive months and is now 9 percent lower than a year ago.
“Either falling or flat new housing commitments in South Australia, Tasmania and the ACT support an expectation for a weaker house building period in these states/territories looking past the next six to twelve months,” he said.
“In Queensland, the story is very much regional, with the housing markets in Brisbane and the Gold Coast in a boom period, while the collapse of resources related construction in the Darling Downs, Fitzroy and Mackay is causing some excess capacity to emerge in those markets, which will need to be filled for housing construction to pick up again. Summed up, these competing force have caused volatility in new housing finance commitments in Queensland over the past six months that is expected to continue into 2017.
“Despite a record home building effort in 2016, expectations for high population growth in 2017, particularly in our major cities, will mean the new home building will need to continue to meet future growing demand,” Pollock said.