Michael Bleby, senior reporter for the Australian Financial Review, shared in a recent article that housing construction is set to pick up in the second half of this year after sentiment around residential construction posted its biggest lift in six years.
Despite these results, the industry has a fair way to go, but lead indicators such as improved credit availability and building approvals show signs of further improvements ahead.
That being said, the turnaround will take time. And official figures published on Wednesday the 15th of January this year showed that new housing starts dropped almost 12% in the three months leading up to September to 47,746. Dwelling commencements of so-called attached houses, apartments, townhouses, and semi-detached homes dropped 21.9% quarter on quarter, which was the biggest quarterly decline in almost 11 years.
So what does that mean? Well, ANZ senior economist Felicity Emmett said that the cycle will reflect more lower lows and higher highs in terms of prices and construction. So because of the dwelling commencements having experienced this drop quarter on quarter, Reserve Bank of Australia Deputy Governor Guy Debelle warned of housing shortfalls and high prices.
Now, with indicators such as these, and the awareness around the market’s response to supply and demand, dwelling values are poised to continue their rising trend throughout 2020.