Home Building To Decline 20%
Labour and materials shortages are set to pinch home supply.
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Australia is staring into the headwinds of a ‘shallow’ 20% decline in housing construction over the next three years as building materials and labour shortages extend building timeframes — despite higher borrowing costs and affordability problems cutting demand, according to the Housing Industry Association (HIA).
The decline from 229,000 housing commencements in the 2021 calendar year to an estimated 183,800 in 2024 is projected based on unemployment remaining at low levels and an extension of construction times from 8.3 months to 12.2 months on average.
However, different sectors of the housing market should be expected to behave differently. A 34% decline in detached houses starts through to 2025 will be offset by an increase in apartment commencements and other attached homes — buy 14% — by 2026 as immigration increases, according to HIA’s quarterly forecast.
“Ongoing strong demand for homes is assisting builders to trade through this cycle, but rising borrowing costs and slowing demand will increase cash flow pressures, before the availability of materials improves,” the HIA report says.
“The combined impact of higher interest rates, increased cost of a new home and capacity constraints will see the volume of homes commencing construction slow to a trough in 2025.”
The decline in home building is forecast to last for 13 quarters — longer than the typical two-year fall according to the HIA.
Following a peak of 141,150 detached home starts, the total will fall to 128,790 this year and then slip 5.2% in 2022. Higher interest rates will dampen demand with commencements cut to 108,890 in 2024 before bottoming out at 99,350 in 2025.
Attached home starts will rise 1.2% in the financial year 2023, and 3.9% in 2024 to reach 80,700 from last year’s 74,350.
The market should expect 4.3% of further growth in 2025 and 4% in 2026 bringing the total to 87,560.
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual
Scheduled auctions fall to winter levels as vendors hold back on going to market
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Grand final fever and the long weekend have dampened scheduled auction activity this weekend, CoreLogic reports.
The number of homes scheduled for auction this weekend is set to halve, with 1,324 properties listed, marking the quietest week since mid June. Melbourne will experience the quietest week since Easter, CoreLogic data shows, with 223 homes prepared to go under the hammer. In Sydney, 805 properties are expected to go to market, the lowest number in seven weeks.
With long weekends in Queensland and South Australia, numbers are also down in Brisbane (111) and Adelaide (86), less than half the properties available for auction the previous week. It’s a less dramatic drop in Canberra, where 83 homes are scheduled for auction, down -22.4 percent on the previous week.
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual
