New home building may lead economic growth

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The Housing Institute of Australia (HIA) has said it might be the housing sector that stimulates the country’s next round of growth. 

The links between economic growth and new home building have strong historical links that were highlighted by HIA in a research note this week. 

Not only do new houses employ people to build them, they also often require the new occupants to buy multiple appliances and furniture to fill them. 

New home building was slow in 2012 but rebounded strongly in 2013 and that looks set to continue this year. 

With employment taking many hits recently, there are hopes the growth in new home building will eventually translate to the employment sector. 

“Understandably, the hope is that the labour market will eventually catch up with the developments in new house building,” the report said. 

“With (housing) starts forecast to grow over the coming two to three years, household consumption, at the behest of new home building, appears on track to improve and play a greater role in an emerging non-mining economic recovery.”


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