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Local building slips back again

Jul 18, 2013

Local residential building work has weakened in the March 2013 quarter – a setback for the sector’s hopes that rate reductions and concessions would boost activity.

Dwelling commencements declined by 8.8 per cent (seasonally adjusted) in the March 2013 quarter compared to the previous quarter with declines in both multi-unit and house commencements.

Compared with March 2012, however, total commencements in the state were still 9.6 per cent higher than the record lows of a year ago.

Housing industry spokesman Robert Harding said the sector remains in a delicate position.

“These data showing reduced home building activity in the first quarter of the year underline the delicate state of residential building in South Australia,” he said.

“Following the welcome increase in activity at the end of 2012, the latest data have erased much of the previous gains.

“With strong data comes the risk of complacency.

“Today’s poor figures underline the need for a sustained and unflinching response to the home building crisis in South Australia.

“The fact remains that the issues which keep residential building activity at such low levels remained unresolved.

“These include the excessive taxation burden on new home building and the quagmire of planning restrictions.”

Harding said the succession of RBA interest rate reductions have had some positive impacts on home building activity, but more stimulus was needed.

“We call on the Reserve Bank to do more in order to support a more solid recovery in the residential construction industry.”

While the number of dwelling commencements showed a quarterly decline and annual rise, the value of the building work done in South Australia fell by 15.4 per cent in the past 12 months, the worst performance of all mainland states.

South Australia’s performance was well behind that of New South Wales and Victoria which recorded positive growth in building work done, the ABS data showed.

 

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