Home building finally surges

Home building has surged in several parts of Australia – but this long awaited recovery is already being threatened by emerging labour – and land – shortages.

The Bureau of Statistics reported yesterday that the total number of new homes commenced rose by 9.4 per cent, on seasonally adjusted figures, in the September quarter.

However commencements remained 6 per cent below those of the same quarter last year.

The surge was concentrated in New South Wales, the ACT, Tasmania and the Northern Territory.

So far, though,  it has by-passed Victoria, Queensland, South Australia and Western Australia.

And the Housing Industry Association says that, even with the surge, the current rate of 136,328 starts a year is falling well short of the nation’s population growth.

Its senior economist, Ben Phillips, also said that substantial supply side obstacles are also starting to re-appear.

He said these include re-emerging labour and land supply shortages.

Mr Phillips noted, though, that the latest surge had followed two consecutive quarters of decline.

He said, too, that the Federal government’s First Home Owner grants had helped.

So had the government’s Social Housing Initiative – and low interest rates.

But the Reserve Bank noted yesterday that there had been “robust” increases in home prices over recent months.

The bank has made no secret of the fact that it has been worried by this development.