Tasmania will likely record solid growth in new residential property construction in the near future, which will buck a nationwide trend of declining activity, according to a Housing Industry Association (HIA) report.
The expected increase in homebuilding activity goes well for industries connected to housing construction, including suppliers of formwork for sale. The report’s forecast showed that building work would rise by 0.3% during the 2017-2018 year.
Rick Sassin, HIA state executive director, said that the construction growth for the 2018-2019 periods would increase at a higher rate, up by 7.4%. The forecast came after homebuilding peaked in 2014-2015 and since then, new home starts began to tumble by nearly 25%.
However, Sassin cited that government measures such as those from the state budget would help in revitalising the sector. The growing demand for houses will also be key in sustaining the expected increase, as Tasmania seeks to maintain homeownership rate of 70% among its residents, compared to the national average of 65%.
Housing starts for detached homes in Tasmania would increase 1.5% in the current fiscal year, following a 15.1% decline in the previous year. On the other hand, multifamily units would drop by 4.7% after increasing 9.7% in the same comparable period.
More people are expected to renovate their homes with an expected growth of 1.5%, according to the report. An anticipated 2.4% increase in renovation activity would uplift the market’s value to $657 million. The report particularly noted that home prices in the Hobart area would climb 7% in July year over year, while apartment prices increased 2.4% due to more units.
Tasmania’s expected growth in homebuilding activity signals a bright future for home buyers, builders and construction suppliers.