New Dwelling Constructions to Touch 180,000 Mark
The construction of new dwellings is all set to get a boost even as renovation projects look to reverse the recessive trend of last year. An article on The Adviser talks about housing commencements in the vicinity of 180,000 in 2014.
Annual growth of 7.1% for dwelling constructions
This puts the yearly growth at 7.1%. Quite something but still the figure fails to compare with the 10.9% growth recorded in the year 2013. Industry forecasts further claim that the dwelling commencements will mellow down once again in 2015 and 2016.
10,000 less homes will be constructed in ‘15’ and ‘16’, bringing down the figure from 180,000 to a shade less than 170,000. The residential construction, if anything, will be great for the retail and supply sector, says Harley Dale, Chief Economist. Nation’s economy depends a lot on residential construction quotes Dale.
Renovation sector gets a shot in the arm
The article also sheds light on the revival of the renovations sector. 1% growth is expected in 2013-14 and this shall be followed by 1.2%, 2.3% and 2.5% growth in subsequent years. You can read the original article here.
Revival of residential sector high on Government’s agenda
The Australian government has worked hard to revive the residential sector. Wasn’t bringing down the cash rate motivated towards refuelling the residential property market?
It goes without saying that an increase in number of dwelling constructions is good news. In my opinion, it is even better news that a lot more unit apartments have fetched approval this time around; it might work well towards lessening the gap between units and houses.
Spending increase good for economy
It is not hard to decipher how the growth in residential sector improves economy. More residence constructions mean a more buoyant construction industry. This gives more jobs to people, curbing unemployment and enhancing overseas migration of skilled worker. Government gets a good reason to take up infrastructure projects.
Again, this implies workers earning more wages. This increases their purchasing power. More spending means more tax for the government. This can be reinfused into further strengthening of infrastructure. No question that it is a beautiful chain reaction!
When do you think cash rates should go up?