SA dwelling construction outperforms Australia

Residential construction in South Australia has posted a stronger increase than for Australia as a whole at the start of the year.

The Housing Industry Association (HIA) said figures released this week for new residential work done in South Australia showed a 3.2 per cent increase in the March 2007 quarter, compared to an increase for Australia of 1.3 per cent.

However, new activity in South Australia was only a moderate 1.3 per cent higher than at the start of the 2006.

The value of work done on multiunits drove the better result, with a 26.2 per cent increase taking the value to $98.4 million, 10.5 per cent higher than in the March 2006 quarter.

Work done on new houses, however, did not fare so well, falling by 1.8 per cent to $349.5 million, a value 1.1 per cent lower than a year earlier. HIA regional director Robert Harding said that the 2006/07 year overall would be moderately better than 2005/06.

He said that low housing affordability was weighing down on the detached house segment.

"The March quarter result for multi-units was encouraging but the detached house market should be looking healthier than it is and 2007/ 08 will be a softer year for new building activity," Mr Harding said.

"The dual problems of a lack of housing affordability and very tight rental markets won't be rectified without a concerted, all-of-government approach"

The measure of work done on alterations and additions, which represents about a quarter of total renovation work in South Australia, fell by 3.6 per cent over the March quarter but was still 10 per cent higher than a year earlier.

"The 2006/07 year will have been a healthly one for the renovation market and another relatively strong year is in store for 2007/08," Mr Harding predicted. back