Victoria Almost 7,000 Homes Short
Commenting today on the release of the September 2008 quarter HIA Victoria State Outlook publication, HIA Executive Director, Victoria, Mr Robert Harding, said that big reductions in interest rates and large fiscal stimulus will help stabilise activity, but 2008/09 is going to be a challenging period for the industry.
“Housing starts will be weaker in 2008/09, reflecting the lagged impact of higher interest rates last year running head on into the global credit crisis and a sustained lack of household and business confidence in Victoria,” Robert Harding said.
The number of housing starts is forecast to fall by 3 per cent in 2008/09 to a level of 145,300, largely due to a very weak second half of 2008. That would leave Victoria around 6,700 dwellings short of underlying demand in 2008/09 alone.
“Despite a softer year, this will be a significantly better outcome than will be evident in New South Wales or Queensland,” Mr Harding said.
“We do expect to see a moderate recovery in new home building over 2009/10 – 2010/11 and this will be very important in bolstering overall activity in the Victorian economy,” said Robert Harding.
Housing starts are forecast to grow by 3 per cent in 2009/10 and 5 per cent in 2010/11, reaching a level of 43,956 starts.
“Lower interest rates and increased government spending needs to boost confidence and we need Victoria’s state government and local governments to do more in removing the many barriers faced by residential construction,” said Mr Harding.
The outlook is a bright one for the renovations sector.
“A flat year for renovations in 2008/09 is expected to be replaced by an increase in investment over the following two years,” said Robert Harding.
“Having reached a value of over $6.9 billion in 2007/08, total investment in renovations is forecast to hit a record $7.37 billion in 2010/11,” Mr Harding added.
