“The credit squeeze and its impact on home building weighed heavily on Australia’s economy in 2019,” commented HIA Senior Economist, Diwa Hopkins.
Preliminary figures released by the ABS provide data on the value of construction work done in Australia.
“A total $65.35 billion worth of construction work was done on new housing in 2019, 8.5 per cent less than the record-level of activity in 2018.
“This home building contraction has just about run its course. Confidence returned to the overall housing market at the end 2019, buoyed by interest rate cuts and house prices returning to growth.
“We expect the improved conditions will flow through to the new home building side of the market this year (2020).
“The coming home building cycle is likely to be a fairly modest affair, with growth in home building forecast to be slow.
“We estimate the industry commenced construction on 174,770 homes in 2019, and we are forecasting for activity to rise only marginally (by 0.6 per cent) in 2020.
“International factors may however impact on the volume of home building in Australia over the medium term,” concluded Ms Hopkins.
Across the states, the value of construction work was done on new housing in 2019 declined in New South Wales (-15.5 per cent), Queensland (-10.1 per cent), South Australia (-7.4 per cent), and Western Australia (-14.0 per cent). Elsewhere the value of work done on new housing increased: by 0.1 per cent in Victoria, 5.4 per cent in Tasmania and 9.6 per cent in the Australian Capital Territory.