THE HOUSING Industry Association has released the Spring edition of the Outlook Report for the Australian Capital Territory.
“It is pleasing to see a positive growth phase in the ACT after three year’s of declining housing starts” said Neil Evans, HIA Executive Director, ACT and Southern NSW.
“The latest official figures show there were 3,875 dwellings commenced during the 2014/15 year which represents the ACT’s fourth consecutive annual decline after activity peaked at over 5,000 starts in 2010/11.
“Over the year to October 2015, detached house prices in the ACT have increased by 5.1 per cent and unit prices have fallen by 2.5 per cent over this period. Rental prices have also fallen.
“These indicators provide a pretty clear indication of the demand side dynamics.
“The protracted period of constrained land supply means there is still pent up demand for new detached houses, however there are a number of developments around the ACT where construction work will be gaining momentum during the year. The outlook for the multi-unit market is less positive.”
Following on from 2014/15 which was the weakest year since 2008/09, detached house starts are forecast to increase by 9.9 per cent in 2015/16 ahead of a more material 20.8 per cent increase in 2016/17.
With a reasonably healthy pipeline of work, multi-unit construction activity in 2015/16 looks set to be on par, or only slightly weaker than 2014/15. However, the easing prices and soft rental market conditions lead to questions about the sustainability of such elevated levels of activity beyond this. The forecasts show a sharp contraction of around 31.0 per cent in multi-unit commencements in 2016/17.
“We are also expecting a lift in the renovations sector were HIA expects to see the next two years of positive growth in the ACT” concluded Mr Evans.