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Residential builders off to a strong start, says Masters Builders Australia

Building activity for the year particularly for home building businesses is set for a strong start, says the latest survey commissioned by Masters Builders of Australia.

The Master Builders National Survey of Building and Construction said the survey findings painted a positive outlook at the national level reflecting the record building approvals and housing loans approved in 2016 with over 70 percent of survey respondents indicating their books are full for at least the next six months.

The association’s National Manager for Housing Matthew Pollock said business conditions improved during the December quarter 2016, with a positive sentiment shared across the residential building and non-residential construction sectors.

Even sales and profitability having edged up and employment intentions the highest since 2014.

“Business confidence is also at its highest level in over two years and reflects a growing sense of optimism in the non-residential construction sector, particularly since the return of the ABCC (Australian Building and Construction Commissioner).

“But commercial builders are looking for business-friendly policies from the government such as a company tax cut and a credible structural budget repair strategy to boost prospects in the sector.

“Residential builders are also looking to the government for leadership in promoting a collaborative approach from all levels of government to take concrete action to remove the structural impediments that stand in the way building more new homes to ensure homeownership is within reach of all Australians,” he said.

Pollock said the results stand in contrast to some of the gloomier outlooks currently circulating for the industry, particularly in housing.

“While some commentators are saying the housing market is about to hit a wall, sentiment from Master Builders members shows that activity in the home building sector will be strong at least for the first six months. There are more new dwellings being built right now than ever before.

“This year should usher in the peak of the current housing cycle, with activity projected to peak at $66.7 billion. The wind down in activity, set to commence in the later half of 2017, is likely to be a slow decline rather than a sharp fall because of low-interest rates and relatively strong demand remaining.

“Meanwhile, sentiment in the non-residential sector has come full circle in 2016. After reaching a low point of 46.3 in the June quarter 2016, the December quarter 2016 marks a return to positive sentiments,” he said.

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June Ramli

June Ramli was a in-house journalist for Elite Agent Magazine.