Latest News ...

Housing slump forecast to continue

The full extent of Australia's housing downturn is becoming clear.

Construction started on significantly fewer homes in the three months to December.

The first concrete was poured on 35,846 new homes during the December quarter, that is almost 9,000 fewer than the recent peak in the March quarter of 2004.

The Housing Industry Association says the latest slump in construction starts is unlikely to be the end of the downturn.

It is the weakest level of activity since the post-GST slump in 2001.

The December total is down 7.5 per cent on the September quarter - the sharpest fall in two-and-a-half years and the sixth decline in seven quarters.

Residential construction activity has not been this weak since 2001, in the aftermath of the GST's introduction.

The Housing Industry Association's chief economist, Harley Dale, says it might not yet be over.

"I think there is some prospect we will see a moderate fall in the March quarter," he said.

"Thereafter I would think that you would probably see a base forming in terms of housing starts, which would in turn feed through into the amount we're actually spending on housing starting to pick up again through the course of 2007."

In six out of the past seven quarters now, housing starts have been falling.

In the latest period, all states have felt the decline and it has been concentrated in multi-unit developments, which are down 16.6 per cent.

Residential construction activity has not been this weak since 2001, in the aftermath of the GST's introduction.