According to economic forecaster BIS Shrapnel, things are looking up for the new housing market this year, with Sydney, south-east Queensland and Perth expected to bounce back after a decline over the last 12 months.
Released last week, the Residential Land Market- Outlook for Demand and Supply, 2011 to 2016 report revealed that new house and land activity slowed in all major markets during the 2010/2011 period. This softening has been attributed to the expiry of the first home owners’ grant, interest rate rises in 2009-10 (and a further rise in November last year), and slowing economic growth throughout the year.
“Following the expiry of the Boost Scheme, first-home buyer demand in 2010/11 was around half that of the stimulus-induced peak of calendar 2009, reflecting the pulling forward of demand to take advantage of the incentive,” senior project manager and report series author, Angie Zigomanis said.
BIS Shrapnel concludes that this should see the residential land market improve nationally over 2011/12, and accelerate further over 2012/13 as economic growth also strengthens.
In contrast, production in Melbourne and Adelaide will continue to weaken, with new dwelling construction in these two major cities having been close to record levels, resulting in a possible oversupply.
By Danielle Ryan, IMAGEination.tv