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An industry chief economist has warned that an abrupt decline in new apartment building would be detrimental to Australia’s economy, despite growing concerns about an oversupply.
Harley Dale of the Housing Industry Association (HIA) said that while there is considerable focus on the supply of new apartments, the vital contribution that new home building makes to the Australian economy should not be forgotten.
“Regardless of particular views around Australia’s different apartment markets, the last thing the Australian economy needs is an abrupt decline in new home construction activity,” he said.
“That outcome would severely dent economic and employment growth.
“Current discussion around new apartment markets in Australia and the potential for oversupply needs to remain balanced and grounded in order to maintain confidence in the new home building sector.”
Mr Dale’s comments coincide with the HIA’s National Outlook report, which forecasts the number of new dwelling commencements to decline by 13 per cent in 2016-17.
However, the association noted that this decline would still see home building at a historically high level of 189,000.
“The cycle is forecast to bottom in 2018-19 at around 163,600, but there is downside to this outlook,” the HIA said.
[Related: CEO slams oversupply concerns]
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