Recent news and survey results released by Master Builders Australia, the prime construction and building trade group in the country, indicate that new home starts are slowing and construction industry hopes are suffering. The latest Master Builders Australia’s National Survey of Building and Construction revealed the fourth consecutive fall in builder sentiment in the June quarter. In other news released by the group, new home approvals fell in April and home lending dropped considerably in May, the fourth consecutive monthly decline.
The Master Builders Building and Construction Index has fallen below 50 for the first time in four years, indicating that builders now expect a decline in building and construction activity. Master Builders Australia Chief Economist, Peter Jones, said of the report: “This survey is a finger on the pulse of the industry. What builders tell us through the survey has historically been a good indication of what lies ahead, and in this case, the future isn’t looking rosy.”
Of the lower housing approvals and lending, he noted “The recent spike in fuel prices coupled with higher interest rates is affecting buyer behavior and suppressing activity in the residential building market. Housing will continue to suffer fallout as the lagged effect of high interest rates and declining consumer confidence flow through.” These are having an effect on the construction industry’s confidence, resulting in the decline in the Building and Construction Index.
Mr. Jones also indicated that the future isn’t offering any quick changes for the industry:“Builders see little prospect of any immediate recovery in the housing sector. More than 50 per cent of respondents have major concerns about housing affordability and more than 70 per cent believe housing affordability will deteriorate further in the coming year.”
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