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Can another stimulus package boost new housing affordability?

Can another stimulus package boost new housing affordability?

April 11, 2011

The Housing Industry Association (HIA) wants the federal government to introduce further stimulus measures to boost new housing starts so they don’t fall back to 2009 global financial crisis levels.

According to HIA chief economist Dr Harley Dale, HIA predicts a slump in both new home building and housing affordability this year as a result of increasing RBA interest rates, sluggish build approval figures and the cooling off of stimulus packages.

HIA figures predicts 25,000 fewer homes will be built in 2011 than 2010.

“Housing starts are forecast to fall by 15 per cent to a level of 143,430 in 2011, wiping out a majority of the short-lived, stimulus driven gains of last year,” Dr Dale said in a media release.

He said the HIA also wants the government to appoint a minister responsible for fixing Australia’s housing shortage and review taxes charged on new home construction.

“If the alarming escalation in residential land values is not arrested, the fall from grace will be much sharper,” he said.

State by state snapshot

  • Victoria: HIA forecasts a 19 per cent drop in housing starts

  • Queensland: The nation’s weakest residential building market is forecast to fall 20 per cent in 2011

  • NSW: Housing starts are forecast to fall four per cent, on top of a current shortfall of 15,000 dwellings per year

  • WA: The state is facing its fourth decline in five years

  • SA, Tasmania, the ACT and the NT: All are expected to see declines in new home construction in 2011

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