Housing activity is growing, but not fast enough to contribute to broader economic growth, according to the latest ABS statistics.
HIA economist Diwa Hopkins says the improvement is “encouraging”.
"However, it was insufficient to contribute to broader economic growth. Rising public sector investment and net exports were the largest contributors to GDP growth in the September quarter,” says Hopkins.
“Most indicators are signalling improved conditions for new home building. The key will be to observe residential construction make positive contributions to growth in coming quarters as mining investment eases.
“The headline result for the September 2013 quarter was 0.6 per cent GDP growth over the quarter and 2.3 per cent growth on an annual basis, a result slightly below expectations.
“Following a disappointing performance in the June quarter, new dwelling expenditure posted a modest rise of 0.2 per cent over the September quarter. Compared with 12 months ago, new dwelling expenditure is 4.6 per cent higher.”
Meanwhile, expenditure on alterations and additions posted a weak result, declining by 1.5 per cent over the quarter. The latest volume of activity currently remains around a decade low. This poor quarterly result brought total dwelling investment down by 0.5 per cent over the quarter to a level that is 1.7 per cent higher than in September 2012 quarter.