The performance of the national economy hasn’t exactly inspired confidence of late, but it has been true to what economists have predicted. The Housing Industry Association’s (HIA’s) latest statement reveals that one of the key factors that is helping the economy along is the construction of new homes.
“The annual rate of growth of the Australian economy slowed modestly in the December 2014 quarter, but not to an extent markedly different from expectations. Annual growth slowed from 2.7 per cent to 2.5 per cent at the end of last year, while the annualised rate of growth improved modestly from 1.4 per cent to 2 per cent,” said HIA Chief Economist Harley Dale in a March 4 statement.
Mr Dale noted that the effect of new home building is not only to increase investment in new housing stock, but is also felt in other areas of the economy as well. As consumers take advantage of the current low interest rate environment and other positive factors to begin building their own custom homes, they are actually helping to bolster the national economy.
“It’s important to recognise the good news and the new dwelling investment sector is part of that, growing by 5.3 per cent in the December 2014 quarter and 12.4 per cent in the 2014 calendar year,” commented Mr Dale.
“The strength in national new home construction has fed through to other parts of the economy – household consumption, for instance, would be weaker if not for a strong new housing sector.”
Master Builders Australia has noted that a continued lack of housing supply is driving dwelling approvals to new heights. With January figures revealing another record high, Peter Jones, chief economist of Master Builders Australia, stated that the looming housing boom will create a definite improvement in the availability housing, but that policy makers should not rest on their laurels.
With custom home building currently buoying the Australian economy and further surges expected as approved homes begin commencement, it’s likely that residential construction will be the country’s hero for a while yet.