Housing gives the states a leg-up
New releases from the Housing Industry Association (HIA) have shone some important light on just ...
New releases from the Housing Industry Association (HIA) have shone some important light on just how strong the housing market is for Australia at the moment - and how it is responsible for wider economic strength.
This is great news for anyone interested in buying a property, as it means they can take part in the next wave of economic growth in the country.
Home construction strikes new heights
The Spring 2014 release of the HIA National Outlook, a housing report card of sorts, has indicated that the 2013-2014 financial year is the strongest year yet for dwelling constructions in the Lucky Country. Chief Economist Harley Dale commented on this in a November 23 press release, noting that this peak is coming at a crucial moment for wider state economies.
"Below trend economic growth and weak labour market outcomes would be considerably worse without the reach a new home building recovery is exerting into the broader economy," he stated.
To keep this growth continuing, Mr Dale wants to see policy reform to match the low cost of borrowing, that he believes could see home building reach even greater heights in the 2015 and 2016 financial years. Currently the aggregate home building level is at 190,000 dwellings - which has boosted the wider economy as well.
Housing the future of state economies
The level of construction of residential real estate in Australia hasn't just been a positive result for the industry itself, as there have been flow-on effects to the rest of the economy. HIA Economist Diwa Hopkins noted that six of the eight states and territories in Australia had increased residential construction activity - and even those that didn't are experiencing near-record levels regardless.
Ms Hopkins used New South Wales as an example of the flow-on effects, noting that their gross state product increased by 2.1 per cent in the 2013-2014 financial year, with 0.2 per cent of this directly down to the residential home building.
Growth in the GSP
This expansion of gross state product was pronounced in many areas of Australia, including the Northern Territory, South Australia, Western Australia, NSW and Queensland. This provides wide range of options for anyone who wishes to seek out investment property in the country - and the NT seems to be the current popular option. Residential property investment in this region rose by a whopping 39.4 per cent in the last financial year.