08 May 2008
Australia: Housing starts in Australia are forecast to fall -9% this year and a further -2% next year, according to a new study by BIS Shrapnel. A total of 171794 dwellings began construction in the 2003/4 financial year, compared to an expected 155850 in 2004/5 and 152250 next year.
The forecasting company says that the main reason for the decline is the high cost of properties to first-time buyers. With Australian interest rates expected to increase over the next year, this ‘affordability barrier’is expected to further depress the market for residential construction.
BIS Shrapnel also believes that this trend will push the market away from detached house construction, towards medium-density residential property, such as semi-detached houses, townhouses and large apartments. The company expects medium-density commencements to hit a record high in 2005/6.