NSW is expected to lead housing construction recovery in 2013, according to the latest Business Outlook report from Deloitte Access Economics.
The firm is forecasting a 9.7% rise in private housing investment in NSW in 2013-14, followed by annual rises of 9.3%, 8.4% and 11.1% in the three subsequent years.
According to the report, the lift in housing construction could ‘comfortably outperform the size and speed of the national recovery’ and is expected to drive an overall upswing in the state’s economy.
“New South Wales’ housing sector is expected to see some good news – which will be something of a welcome change for a perennial underperformer… In the main that is due to lower mortgage rates, with the latter expected to work their usual magic, but it also helps that land release is expected to accelerate, and that while rental vacancy rates have increased, they are still signalling a need for new housing stock.
Furthermore, the report says that while the state’s population growth has been ‘less than impressive’, overall population growth in NSW is improving.
“That won’t generate a massive housing recovery, but NSW’s performance should be better than in other states, if only because its housing construction sector has been so weak for so long.”
However, it’s not all good news. Deloitte says rental vacancy rates are climbing, while approvals for renovation work remains stagnant.
The report has positive economic expectations for WA, QLD and the NT, with slightly more modest expectations for VIC and the ACT and negative ones for TAS and SA.