Wednesday, December 15, 2010
Total nationwide starts slipped a near-record 13 per cent in the September quarter - the biggest slide since the introduction of the Goods and Services Tax a decade ago.
Starts on public sector units halved, falling from 4400 in the June quarter to just 2100 in the September quarter as low income housing projects funded with stimulus money dried up.
"We are heading into a much weaker period," said Housing Industry Association economist Andrew Harvey. "Bear in mind the September quarter was ahead of any impact from the Melbourne Cup day interest rate hikes"...
Rain was also responsible for some of the downturn with NSW getting one and a half times its usual September rainfall, South Australia and Western Australia three times the norm, and Queensland six times its usual downpour.
By contrast Victoria received only slightly more rain than normal.
But Victoria has been leading the nation in home building for years, typically building twice as many private sector houses as NSW; in the September quarter building 9865 to NSW's 4180.
"Things are not uniform across across the nation," said Commonwealth Securities economist Savanth Sebastian. Building in NSW and Queensland is 11 per cent below long term averages, in Victoria it's 35 per cent above. Weaker population growth in Queensland has played a part and the super low vacancy rates across NSW attest to the lack of building in that state."
Business confidence fell for the third consecutive month in November with the NAB survey showing worse conditions in mining, retail, wholesale, transport and utilities, and finance, business and property. Conditions improved in only three groups; construction, recreation and manufacturing.
"Corporate Australia is at present going nowhere," said Mr Sebastian. "The rate hike in November robbed businesses of much-needed optimism. Confidence and conditions are unlikely to improve to any great degree in the near term."
"We expect the November rate hike to have a long lasting impact. Business owners are trimming future orders, retailers are aggressively discounting, borrowing costs are rising, and the higher Aussie dollar is curbing manufacturing exports."
"It is likely activity will remain subdued in the near term."
Published in today's SMH and Age
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