The debate surrounding a possible oversupply of newly constructed apartments needs to remain balanced, a housing industry association has warned, or we risk ruining confidence in the new home building sector.
“There is considerable focus at present on the supply of new apartments, but we shouldn’t forget the vital contribution new home construction activity continues to provide to the Australian economy,” said Housing Industry Association (HIA) chief economist, Dr Harley Dale said.
“Regardless of particular views around Australia’s different apartment markets, the last thing the Australian economy needs is an abrupt decline in new home construction activity.”
That outcome would “severely dent” economic and employment growth, he warned.
The latest HIA National Outlook highlights the unprecedented uncertainty facing the new home building outlook given the large number of apartment projects started but not yet completed, and the record pipeline of approvals which could be converted to starts.
Following an expected 1% rise in total new dwelling commencements in 2016/17, the HIA is forecasting a decline of 13% in 2016/17 which would take commencements to a still historically high level of nearly 189,000.