Building materials price slowdown a confidence boost
New data on building supplies and lending indicators points towards a boost for housing in 2025, according to the Housing Industry Australia.
NEW data on building supplies and lending indicators points towards a boost for housing in 2025.
That’s the view of Housing Industry Australia economist Maurice Tapang following the release of the Australian Bureau of Statistics (ABS) surveys.
He said: “Prices of home building materials grew by 1.4 per cent in the year to September 2024, significantly slower than other goods and services as measured by CPI.
“Disruptions to global supply chains have largely abated, the volume of home building has slowed, and build times are back to pre-pandemic levels.
“Stable interest rates and construction costs are seeing consumers increasingly engage in new home building.”
The confidence is consistent with the 14.3 per cent rise in lending for new home purchase and construction in the September quarter 2024 compared to the same time in the previous year, he said.
“The rise in activity in the new home segment is increasingly driven by a return of more owner-occupiers to the market as unemployment remains low, and interest rates remain unchanged.
“Investors have been also active in building new homes in this cycle amid the shortage of housing, evident in rising rental yields, house prices and increasing activity in the established dwelling market.
“First home buyers have been very resilient in this cycle, despite the rise in the cash rate.
“Lending to first home buyers in the September quarter 2024 rose by 7.8 per cent compared to the same time in the previous year.
“As is typical of these cycles, the first to return to market are investors, followed by trade-up owner occupiers, first home buyers and increasingly those building a new home.
“The leading indicators reinforce the suggestion of an increase in home building activity in late 2024 onwards.”
Materials price increases were recorded in copper pipes and fittings (+15.1 per cent). This was followed by electrical cable and conduit (+12.9 per cent), electrical equipment (+9.7 per cent), fibrous cement products (+7.3 per cent), and paint and other coatings (+6.5 per cent).
