National dwelling commencements fell again in the December quarter, reinforcing the urgent need for governments to address supply side policy failures, according to Master Builders Australia, the peak building and construction industry association.

Mr Peter Jones, Master Builders’ Chief Economist said, “The recovery in residential building will be shortlived unless policy changes are implemented.”
“After a bounce-back in dwelling commencements in 2009/10, two consecutive quarterly declines means the upswing is in danger of stalling.”

Mr Jones said, “In the wake of heavy-handed policy, builders have reported an across the board slowing in sales, particularly for new houses.”
“A period of interest rate stability from the Reserve Bank is now vital to ensure that an upswing in the interest-rate-sensitive residential building sector becomes entrenched.”

Policies that work to restrict dwelling starts must be of concern to the Federal Government, as it prevents the residential building industry from meeting a serious undersupply of housing, risking higher rents and house prices as more people chase less stock.”

“Australia needs a long and strong housing upturn to overcome a massive shortfall in dwellings.”

“What’s needed is several years building 200,000 plus dwellings per annum to not only meet the demands of a growing population, but to make inroads into the accumulated deficit of housing that’s arisen because of previous underbuilding.”

Mr Jones said, “Unless there is urgent reform to address supply bottlenecks, the strong industry response needed to meet demand will not eventuate, with dire consequences for housing affordability.”