Tough times ahead for Australian housing construction Posted on July 8th, 2011

Both the Housing Industry Association (HIA) and Master Builders Australia (MBA) have just released reports on the gloomy forecasts for the Australian building and construction industry, particularly in the residential sector.

HIA, in its National Outlook [8] forecast a fall of 13% in housing starts over the two-year period 2010/11 to 2011/12, reaching a low of 143,770 starts. In addition MBA released its builder sentiment report [9] finding that ‘builders expect building industry activity to fall over the next six months.”

Australian residential building activity is a big driver to the relative health of the forest products industry. As a result the multiple adverse impacts from decreased activity, negative sentiment, policy uncertainty, higher interest rates, high exchange rates, increasing input costs and increased volumes of imports, puts increasing pressure on Australian forest products industry and will make the forthcoming two years very challenging indeed.