The construction industry is about to witness a recovery this year, but uncertainties due to the coronavirus epidemic could dampen these prospects, said an expert.
Angela Lillicrap, economist at the Housing Industry Association, said that a significant improvement in housing market sentiment was observed in the second half of 2019.
"The leading indicators suggested that demand for new homes had stabilized and would return to growth by 2020. This is confirmed by the number of new housing starts which increased slightly over the during the December 2019 quarter, "she said.
Figures from the Australian Bureau of Statistics show that new home construction rose 1.2% in the quarter, bringing the total number of housing starts for the year to 174,246. were recorded in both individual dwellings and multi-unit dwellings, the latter registering stronger growth at 2.9%.
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Despite the improvement recorded during the second half, the total number of housing starts for 2019 is still 22.6% lower than in 2018.
"Victoria declared the weakest quarter for multi-unit start-ups since 2009. This result follows a sustained construction boom in several state units. It represents a return to a level of construction closer to what was typical before these boom years. ", said Lillicrap.
This growth in housing starts was only one of the first indicators pointing to a solid 2020 year. Separate ABS figures show that investors were increasing their market participation before the COVID-19 epidemic began to weigh on the economy and the real estate sector.
Investor loans increased 3.4% in the three months to February. On an annual basis, the investor segment recorded a 6.3% financing gain.
"These results, along with other leading indicators such as new home sales and building approval data, continue to confirm that the housing market has reached a mid-point of 2019, "said Lillicrap.
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