The long-awaited stabilisation of new homes in the market is on the horizon, the Housing Industry Association (HIA) says.
According to the HIA’s quarterly economic and industry outlook, there is evidence the market is heading towards a point where the supply of new homes meets, rather than exceeds, demographic growth requirements.
But with the recent controversy about building standards, it’s hard to see an imminent spike in confidence.
HIA Chief Economist Tim Reardon said the easing of wider economic and housing market conditions had given rise to a situation where monetary and fiscal stimulus is possible, without fear of overheating house prices.
“If economic activity improves, the credit squeeze dissipates, home prices stabilise and the recent stimulus measures take hold, the supply of new work into the pipeline will soon reach its low point.”
With auction clearance rates in Melbourne and Sydney at 80 per cent, it appears that home prices are firming which will start to bring more confidence back into the market.
According to the HIA there will be 180,000 new per year compared to the 200,000 that have been built over the past five years.
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