The Housing Industry Association (HIA) has released its National Outlook report, and HIA chief economist Harley Dale has said new home building faces headwinds in the year ahead.
“The dominant constraints to a sustained recovery in residential construction continue to be found on the supply side. A further tightening of credit conditions for residential development, together with disproportionately high and inefficient taxation as well as excessive regulation of new housing stifle the potential of an inherently efficient component of the Australian economy," Dale said.
While Dale said low interest rates were creating a more favourable environment for home building, he called on Federal government action to stimulate "a sustainable recovery".
"If the residential construction industry is to play its required role in rebalancing Australia’s economic growth then Federal leadership is imperative in a range of areas including a reduction in taxation and regulatory costs, increased banking competition, and greater workplace flexibility," he said.
The HIA has predicted a flat year for housing starts across Australia, though NSW and WA are standout exceptions. The organisation forecast a 14% increase in construction in NSW and a 17% rise in WA.