Home building making a strong foundation for wider economy
November 25, 2014 / Written by Rich Harvey
Researching movements in housing construction is a great way of getting a feel for how the housing market could grow in the coming months, and a new release from the Housing Industry Association (HIA) indicates that this is now at an all-time high.
The Spring 2014 release of the HIA national Outlook, released on November 23, shows that the 2013-2014 financial year is expected to gave an aggregate total of dwelling constructions that rises above 190,000. This would break the previous record of 187,000 homes which was set in 1994.
These conditions bode well for anyone seeking out a property investment in Australia. More construction will mean more homes for sale down the line, and thus more opportunities for a great portfolio expansion.
Boosting the wider economy
This is not just great news for the investment market, but also for the wider economy. In another HIA release from the last week, economist Diwa Hopkins noted that residential construction has had a tangible positive effect on the NSW economy.
"In 2013/14, activity in residential construction contributed to overall growth. In New South Wales, for example, where gross state product grew by 2.1 per cent, 0.2 percentage points of this were directly attributable to residential construction," said Ms Hopkins.
Clearly, by engaging the services of professional buyers agents, the people of new South Wales are able to make great investment decisions that are helping to bolster the wider economy. This is particularly important as the resource economies begin to wane.
Changes to come
As always, the HIA have made calls for policy reform to keep the strong housing supply alive. Chief Economist at the HIA Harley Dale said that reform on tax and regulations is a necessity to keep moving forward.
"Policy makers need to understand that supply-side constraints can only be held at bay by low interest rates for so long," added Ms Hopkins.
Following the supply levels across the country is a great way of knowing when might be a good time to buy a house in Australia, but for the question of where to invest, more help might be required. By using the services of a buyers agent, budding investors can gain a huge world of insight into where growth areas are cropping up, as well as how to get a great deal on property.
Property investors need to be careful not to rush in a choose a property on the basis of a glossy brochure without checking the supply and demand conditions of an area. Investment "hot spots" promoted in magazines may become a magnet for developers which in some cases can lead to oversupply. Property investors need to research carefully and look at the future long term demand, rental yields, mix of owner occupier buyers and investor and days on market to name a few.
As the most awarded buyers agency in Australia, Property Buyer is a great place for you to get access to the latest research and some of the best properties both on and off the market. Talk to us today to find out how to make the most of current home building conditions.