While construction of new homes remains strong for 2016/17, the Housing Industry of Australia foresee it declining in coming years.
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The latest HIA National Outlook highlights the vital role new housing activity plays in the economy, though also recognises the unprecedented uncertainty in the future.
HIA chief economist Dr Harley Dale said the current building boom was like any other and is the longest and largest in the country’s history.
The report forecasts new dwelling commencements to have reached it’s peak in 2015/16 and will be followed by three consecutive years of decline before it will bottom out in 2018/19.
Dr Dale said the upside to this was the home renovation sector would pick up pace.
“ As the down cycle in new home building unfolds, the record pipeline of medium/high density dwellings in particular creates considerable uncertainty as to the timing and magnitude of the decline in construction,” he said.
“Just as new home building activity seems to be reaching its peak, the recovery in the home renovations market has started to gather pace.”
Dr Dale said the HIA expects national renovations activity to grow by 4.2 per cent in 2015/16 – the fastest rate of increase in over a decade.
Further growth over subsequent years is forecast to take renovations activity to a value of nearly $33.2 billion by 2018/19.