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Outlook for Australia's Residential Construction Industry: Challenges and Opportunities Ahead

Graham Wolfe, Chief Executive of HIA, discusses the current state and future outlook of Australia's residential construction industry in September 2012. He highlights key challenges such as falling housing starts and renovation investment, amidst population growth driven by overseas and interstate migration. Despite uncertainties, there are positive signs, including improved housing affordability and shifting opportunities in renovations and new home building. Wolfe emphasizes the need for change and adaptation in the industry to navigate these evolving conditions.

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Outlook for Australia's Residential Construction Industry: Challenges and Opportunities Ahead

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  1. Housing AustraliansThe Outlook for Australia’s Residential Construction Industry Graham Wolfe HIA Chief Executive – Industry Policy & Media 20 September 2012

  2. Population Growth – Australia

  3. NET OVERSEAS MIGRATION - NSW

  4. New housing starts in New South Wales

  5. NET INTERSTATE MIGRATION - NSW

  6. POPULATION GROWTH - NSW

  7. MOVING ANNUAL TOTAL - NSW

  8. NET OVERSEAS MIGRATION - VICTORIA

  9. POPULATION GROWTH - VICTORIA

  10. MOVING ANNUAL TOTAL - VICTORIA

  11. NET INTERSTATE MIGRATION - QUEENSLAND

  12. MOVING ANNUAL TOTAL - QUEENSLAND

  13. POPULATION GROWTH - AUSTRALIA

  14. Gap between population growth and new stock

  15. The world is a worry Europe is a basket case, but … • … it’s finding a way to muddle through. • Confidence, credit, and exposure for East Asia are the key linkages to Australia. Updates on the US economy are patchy • One recent, large, positive – the housing market seems to be recovering China holding up “okayish”? • China has slowed, and there are some concerns, but… • … these concerns still look over-played. • East Asia in general is slowing down and the focus is here to stay for a while.

  16. The Australian Economy – how good are we?

  17. The Australian Economy – how good are we?

  18. The good, the bad, and the ugly

  19. Let’s get the ugly out of the way …

  20. The ugly: Housing starts are heading in the wrong direction, and ...

  21. ... it’s a synchronised downturn and …

  22. … renovations are also sliding • Renovations investment has fallen over four consecutive quarters.

  23. The bad: consumers are unsure and nervous

  24. The good and bad: easing dwelling prices • Do we really need to scare the living daylights out of people?

  25. Median Dwelling Price Baby boomer FHB aged children GFC-induced stimulus 4% unemployment Baby boomer investors 6% Interest rate 17% Interest rate 4.25% Interest rate 6.9% unemployment Infrastructure levies surge Sydney is FULL! and GST commences Unemployment 8.5%

  26. The good and bad: falling interest rates • Are we at the end of the line?

  27. The good: housing affordability is improving

  28. The good: some indicators are turning

  29. The good: no shortage of potential

  30. The good: no shortage of potential

  31. The good: no shortage of potential

  32. So what does the future hold?

  33. Short term housing starts outlook

  34. The short term outlook for renovations

  35. So, what now? • There remain many short term challenges to residential construction, … • … both new home building and renovations. • The renovations model is changing and that brings opportunity. • So too does state governments realising things have to change on the new home building front. • People will adjust to the ‘new world’ for housing prices and with that will come opportunity as well. • Australia’s housing backyard needs work and HIA will keep up the fight. • The key challenge is uncertainty around when we will see ‘the turn’.

  36. THANK YOU FOR YOUR TIMEGraham Wolfe HIA Chief Executive – Industry Policy & MediaSeptember 2012

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