This article is from the Australian Property Journal archive
The residential construction market has bucked the trend, activity has fallen by 4.9% in the December 2005 quarter, the sharpest fall in the cycle to $8.52 billion, according to the Australian Bureau of Statistics.
Yesterday’s figures went against expectations that residential construction work would rise in the December 2005 quarter.
According to the ABS’s Construction Work Done report, the total value of new building work activity fell by 5.8% to $7.13 billion, reflecting an 8.7% drop in apartment building activity and a 4.4% decline in detached house building.
In additions, alterations and additions activity, not a measure of the entire renovations industry, eased by 0.1% to $1.39 billion.
HIA’s chief economist Harley Dale said that an easing in the residential work pipeline was flowing through into lower levels of housing activity.
“Expenditure on housing will continue to fall, but leading indicators still point to an easing rather than tanking in building activity.
“At the same time the household sector remains far more cautious when it comes to spending decisions made regarding housing than was apparent during the boom times,” he added.
Dale said coupled with the ABS released figures on wages growth which showed a slowing labour market – clearly supports a continuation of stable interest rates.
He added that stable interest rates will ensure that the pull-back in housing continues to be moderate and that over time we see more certainty return on the part of households.
“Housing activity would continue to moderate throughout 2006,” Dale concluded.
Across the country, residential building activity fell by 21% in Tasmania and was down by 19% in the Australian Capital Territory, 9% in New South Wales, 5% in South Australia, and 3% in Queensland.
Total building activity increased by 8% in the Northern Territory and residential activity rose by 4% in Western Australia.
Overall, total construction rose by 0.1% in the December 2005 quarter to $22.58 billion, boosted by engineering works which rose by 6.1%.
The value of construction work on non-residential fell by 1.7% while building activities fell by 3.8%.
By Kathryn O’Meara
