March Building Activity Confirms Housing in Doldrums
The March quarter building activity figures released today by the Australian Bureau of Statistics (ABS) confirm the housing industry is still struggling.
The number of dwelling commencements continued to deteriorate in the March quarter, with the seasonally adjusted figures showing significant declines in NSW and ACT of 35.8 per cent and 41.2 per cent respectively. The national decline in dwelling commencements for the March quarter was 12.1 per cent. Even in trend terms, the story remains the same.
Wilhelm Harnisch, CEO of Master Builders Australia said the statistics back up the findings of other surveys that show there is considerable uncertainty and reluctance amongst new home buyers.
“While today’s data is a look into the ‘rear mirror,’ forward housing indicators do not provide much optimism for a sustainable housing recovery taking place this year.
“The industry is anxiously awaiting the cumulative effect of four Reserve Bank rate cuts totalling 1.25 per cent over recent months to kick in.
“The March ABS figures indicate the rate cuts from November and December 2011 haven’t had the effect they typically would have. The industry is relying on the effect from last year’s cuts, and the rate cuts in May and June this year begin to take hold.
“The March quarter statistics confirm the state of Australia’s two speed economy and the need for the Reserve Bank not to discount additional rate cuts,” Mr Harnisch concluded.