Published 6:31 PM, 14 Mar 2012 Last update 0:36 AM, 15 Mar 2012
The housing industry believes the federal government should ditch its pledge to bring the budget back to surplus in 2012/13 and instead concentrate on reforms that would lift the supply of new homes.
New data released on Wednesday showed that building started on just 33,653 homes during the December quarter, 6.9 per cent fewer than the previous three months and a 13.4 per cent decline than a year earlier.
This was the lowest quarterly number since mid-2009 when the economy was just recovering from the shock of the global financial crisis.
Housing Industry Association senior economist Andrew Harvey calculated that there were nearly 22,000 less homes built in 2011 than the previous year, and that detached housing starts in the private sector had now fallen for eight consecutive quarters.
"Rather than focusing on a short-term budget surplus outcome the Commonwealth Government would be better placed looking at how it can reform housing supply in order to lift home building levels, boost economic activity, and secure important productivity benefits," Mr Harvey said in a statement.
He described the pace of reforms in reducing the high cost of new housing as "glacial" and that the unnecessary social and economic costs were "unsustainable".
Westpac chief economist Bill Evans said continuing softness in the housing market, along with weak economic growth, rising unemployment and higher mortgage rates, are all impacting on consumer confidence.
He said the latest reading of the Westpac-Melbourne Institute consumer sentiment index showing a five per cent drop to 96.1 in March was "disappointing".
"Sensitivity to interest rates has clearly been one factor responsible for this weak print," Mr Evans said releasing the data.
He also blamed a three per cent rise in petrol prices between February and March for the index falling below the 100 level. He said this clearly showed pessimists outnumbering optimists.
Mr Evans said the timing of the February confidence outcome had not fully captured the decision by home loan providers to raise their mortgage rates by an average of 10 per cent when borrowers had been expecting a cut by both the Reserve Bank and retail banks last month.
Opposition treasury spokesman Joe Hockey said the fall in confidence highlighted the fragility of the economy, and that consumers clearly do not trust the Labor government to deliver stability.
"The government must immediately act to restore confidence in the Australian economy by repealing the onerous carbon and mining taxes, which will drive up the price of everything and cost Australians jobs," Mr Hockey said in a statement.
The Reserve Bank board will next meet on April 3.
Mr Evans said since the last board meeting there had been a steady stream of disappointing economic data releases.
"We assess that the case has already been made for lower (interest) rates in Australia but expect that, at this stage, the board is not convinced," he said.
However, he expects a rate cut in either May or June.
The issue seems to be that houses are too expensive and not being built where people want to live. I think the construction industry is in trouble but let's face it they've had a pretty good run the past decade with ballooning population growth, high wages and rising house and land prices. Not to mention government handouts to buyers. They may just have to tighten their belts like the other parts of the economy.
The issue seems to be that houses are too expensive and not being built where people want to live. I think the construction industry is in trouble but let's face it they've had a pretty good run the past decade with ballooning population growth, high wages and rising house and land prices. Not to mention government handouts to buyers. They may just have to tighten their belts like the other parts of the economy.
Yep, dead right.
The economy is tanking and half wits like this are trying to claim we need to be building houses at the same rate as the highest building rate in Austalian history, and then compare the slowest month in December as basis point.
Absolutely disgraceful.
The entire economy has been gutted of all productive advantage in favour of mining and trades through speculation on house prices - its a criminal destruction of Australian society.
The Australian government needs to start investing in Australias future with strategic allocation of capital towards research and development areas which will translate into high income, high profit returning industries - not hitting a nail with hammer and digging up fucking rocks.
The idea that the Federal Government should continue the welfare of the housing industry through negative gearing, grants, assistance, tax breaks, land monopolies etc- is a sick joke.
Australians need to stop leaning on the shovel and strutting around the world like brain dead laborers from the dark ages and grow the hell up - its just embarrassing.
Construction definitely needs to be higher. The problem is that there is no infrastructure to support construction. It's not construction costs that are the problems. The problem is finding land that people think is good value in order to pay for someone to construct something. You can't blame the developers or land holders for this, it's a free market.
The problem is the limited area that is close to high wages. Most of that land has been taken up by large blocks with poorly designed housing providing low density.
If there is any one factor to blame for lack of housing construction it is the lack of investment in transport infrastructure.
ie. Rather than invest directly in propping construction, they should fix the root cause of the problem via investment in high-speed rail to urban centres ~100km from each capitals.
Construction would farking BOOM if a decent service was provide to the regional centres. And the BOOM would be much more sustainable - for generations to come.
Unfortunately no government in recent memory has been looking further into the future than the next election. When the surpluses started piling up at the start of the mining boom it should have all been invested back into transport infrastructure. Instead it got handed back as tax cuts which just stimulated the economy further and helped to increase house prices. The stupidity of our leaders is mind boggling. Whether you love or hate the idea of a NBN at least it is something which will increase our productivity.
Australian building activity has continued to slide, due to weak demand and lower workloads, a private study has found.
The Australian Industry Group-Housing Industry Association's performance of construction index (PCI) fell 1.3 points to 34.9 in April.
A reading below 50 indicates a contraction in activity.
The reading means the index has been in contraction for 22 months.
Much of the weakness was due to a sharp drop in apartment building activity, which was the weakest of the four sub-sectors with a reading of 22.9.
House building was also weak, at 33.3, as was commercial construction, at 35.2.
The best-performing sub-sector, engineering construction, fell slightly to 40.9.
The figures show that all four sub-sectors experienced falls and contracted.
The new orders sub-index declined 0.9 points to 32.3.
Australian Industry Group (Ai Group) director of public policy Dr Peter Burn said the continuing trend of low activity reflected weak growth in other sectors.
The problem is finding land that people think is good value in order to pay for someone to construct something. You can't blame the developers or land holders for this, it's a free market.
If there is any one factor to blame for lack of housing construction it is the lack of investment in transport infrastructure.
ie. Rather than invest directly in propping construction, they should fix the root cause of the problem via investment in high-speed rail to urban centres ~100km from each capitals.
Construction would farking BOOM if a decent service was provide to the regional centres. And the BOOM would be much more sustainable - for generations to come.
Construction definitely needs to be higher. The problem is that there is no infrastructure to support construction. It's not construction costs that are the problems. The problem is finding land that people think is good value in order to pay for someone to construct something. You can't blame the developers or land holders for this, it's a free market.
The problem is the limited area that is close to high wages. Most of that land has been taken up by large blocks with poorly designed housing providing low density.
If there is any one factor to blame for lack of housing construction it is the lack of investment in transport infrastructure.
ie. Rather than invest directly in propping construction, they should fix the root cause of the problem via investment in high-speed rail to urban centres ~100km from each capitals.
Construction would farking BOOM if a decent service was provide to the regional centres. And the BOOM would be much more sustainable - for generations to come.
Put a stop every 50km (15mins) and watch the population boom.
The whole housing shortage thing is simply bullshit - get over it. There is more stock on the market now that ever - its just piling up.
We have threads detailing the incredible falls in sales - 800 houses a weekend with 80% clearance rates down to barely over one hundred houses selling.
All the while the number of houses just grows, and grows and grows.
All the holiday houses in every major coastal town, non major, not even coastal are having their prices SLASHED - nothing at all is selling.
So not - the problem is not lack of houses, lack of construction - its an unsubstantiated LIE designed to do nothing more than line the pockets of invested interests.
What Australia needs is long term jobs in niche manufacturing industries, science (biomedical, nano, chemical, technical, computing, robotics, green tech, energy, food science, engineering etc, etc - the government needs to invest in areas which we can develop and call our own and export to the world - evacuated tube transport, low energy water desalination, whatever - but this is what we need to do.
Our pursuit of the dumbest, most idiotic, retarded, mentally challenged areas of financial employment - mining and laboring as a bricky, concreter, chippie etc is an embarrassing failure and an admission of our own intellectual regression - it is a complete disaster.
People calling for an injection to reinstate a dangerous bubble should not be listened to and instead ridiculed for their asinine position.
Creating the type of long term investment I am advocating would allow people to move from the cities, would provide wealth across the nation which is not geographically reliant on geological formations, self reliance, it would allow for investment in the types of infrastructure regionally as there would be employment there for people.
Australia needs to learn the lesson that simply relying on housing as our entire economic model is one destined for failure, is regressive, intellectually embarrassing and needs to be abandoned in favor of a more sustainable long term model .
This is not to say that we should have high speed rail (who ever said we need a stop every 50 kms has no idea about rail and the size of Australia...) the high speed rail link has already been mapped out going inland of the great divide to sydney, and the other being coastal. It is a good idea - however it wont do SHIT if there are no jobs, and if we rely on housing as our model of economic growth we are absolutely screwed. Its a retarded model for the dimmest of people.
There are train lines going in regional rail link, etc - however we are still far too focused on our obsession with cars with Ballieu again looking for more freeways to bring more cars into the city...crazy shit.
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