With the latest update of GDP figures showing Australia is officially in recession, the news does not get any better in the property market, according to the Housing Industry Association. 

“New home building activity will weigh further on Australia’s GDP growth in the second half of 2020,” said Tim Reardon, HIA Chief Economist. 

“Following (the) negative GDP result for the March quarter - and the expected negative result for the June quarter - the economy is in urgent need of measures to kick-start our post COVID-19 recovery.

At a Glance:

• Decline in residential building activity has detracted from GDP for the last six quarters
• Contraction was prior to the COVID-19 restrictions impacting home building.
• Leading indicators show a sharper contraction in residential building activity is imminent

“The persistent decline in residential building activity has detracted from GDP for the last six quarters, and is already 14 per cent down from the peak.

“This contraction was prior to the COVID-19 restrictions impacting home building.

“Leading indicators show that a sharper contraction in residential building activity is imminent.

“The long lead-times for residential building mean that the full impact of the COVID-19 crisis on residential building won’t hit GDP until later in the year.

“Without appropriate support up to half a million jobs could be at risk as the number of homes Australians will build next year is expected to be around half of the number of homes we built last year.

“The shock to the economy from the halting of overseas migration, the absence of student arrivals and uncertainty over the domestic economy will see the housing market continue to contract through 2020 and into 2021.

“This shock will reverberate through the residential building industry, up and down the supply chain. Employment in the sector is not expected to recover within the next two years.

“The sector engages over 1 million people and we expect to build half as many homes next year as we did last year, requiring a halving of the number of hours worked on building sites."

With the announcement by the Government of the HomeBuilder stimulus package yesterday, the HIA has acknowledged that the package could generate over $15 billion in national economic activity.

"This package will see an improvement in this outlook. It will see more projects reaching commencement," said Mr Reardon to WILLIAMS MEDIA.

"The package plays a very important role in slowing the speed and depth of this downturn."

Similar to this:

Support for display homes an important step: HIA

Extended hours for NSW building sites will save jobs: HIA

NSW Government stamp duty relief a welcome announcement: HIA