FOR IMMEDIATE RELEASE

10 May 2013

HIA Housing Report Card Signals Challenging Year for Residential Construction
The Housing Industry Association, the voice of Australias residential building industry, today released the Autumn 2013 edition of its National Outlook, Australias most comprehensive housing report card. HIAs latest National Outlook highlights a challenging environment for businesses operating in both sectors of the residential construction industry. Cautious household attitudes continue to restrain expenditure on residential construction, although many prospective buyers are being impeded by tight credit conditions. This impediment is preventing some new home building and larger renovation jobs from proceeding, said HIA Chief Economist, Dr Harley Dale. 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, said Harley Dale. Lower interest rates are playing a role in creating a more favourable environment for residential construction activity, but Federal government action holds the key to a sustainable recovery, commented Harley Dale. If the residential construction industry is to play its required role in rebalancing Australias 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, said Harley Dale. In terms of the short term outlook for residential construction it is encouraging to see a new home building recovery underway in New South Wales and Western Australia. However, it appears unlikely that there will be any growth in national housing starts in 2013. HIA is forecasting a flat year for housing starts in Australia in 2013, although NSW starts are forecast to increase by 14 per cent and WA starts by 17 per cent. Growth of 2.5 per cent and 2.8 per cent is forecast for national housing starts in 2014 and 2015, respectively, which would take starts to a level of 155,336. Renovations activity endured a disappointing year in 2012, falling to its lowest level since 2002, with weaker levels of home equity restricting finance for renovation jobs. HIA is forecasting modest growth of 1.9 per cent in 2013 and 2.3 per cent in 2014 which would take the value of total renovations investment to $29.7 billion, around $1.4 billion short of the 2011 peak. HIA yesterday launched its Federal Election 2013 policy platform - Housing Australians. HIAs 50 policy actions provide a blueprint for a future federal government to address the growing housing affordability challenge facing Australia and to ensure a sustainable residential construction recovery commensurate with the needs of the Australian economy and its growing population. To find out more go to: www.australianeedsbuilding.com.au or follow us on Twitter @HIAhousingvoice. For further information please contact: Harley Dale, Chief Economist 0418 994 186 Shane Garrett, Senior Economist 0416 633 261 For copies of the publication (media only) please contact: Kirsten Lewis on k.lewis@hia.com.au

Australia Housing Starts Forecasts

Source: HIA Economics Group 180.00 170.00 160.00 168.76 Forecast

170.11

154.80

153.69

154.12

155.34

Thousand dwellings commenced

150.00 140.00 130.00

148.59
138.64

150.88

147.61

147.39

151.04

120.00 110.00
100.00 2004 (a) 2005 (a) 2006 (a) 2007 (a) 2008 (a) 2009 (a) 2010 (a) 2011 (a) 2012 (a) 2013 2014 2015

Australia Renovations Forecasts

Source: HIA Economics Group 31,500 31,035 31,000 30,500 30,148 29,740 29,416 29,017 28,482 29,689 29,085 30,640 29,990 31,101

Forecast

Value of Investment

30,000 29,500 29,000

29,315

28,500
28,000 27,500 27,000 2004 (a) 2005 (a) 2006 (a) 2007 (a) 2008 (a) 2009 (a) 2010 (a) 2011 (a)

2012 (a)

2013

2014

2015

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