BUILDING STARTS IMPROVE July 2nd 2010 - SPECIALISED PROPERTY GROUP

New home building has undergone a major recovery but will need to keep improving, the Housing Industry Association (HIA) said this week.

The association's quarterly National Outlook Report shows that housing starts are forecast to increase by 20 per cent in 2010 to a level of 165,940, before falling back by 3 per cent in 2011.

On a financial year basis, the number of housing starts is forecast to increase by 22 per cent in 2009/10 and 2 per cent in 2010/11 to reach a level of 162,600. Starts are forecast to be flat in 2011/12.

HIA Chief Economist Dr Harley Dale said that Australia needs to build over 190,000 dwellings in 2010 alone to meet underlying demand.

"And over the next ten years we need to build 420,000 dwellings more than we built over the last decade", Dale said.

"Meanwhile the renovations sector is looking healthier with three consecutive quarters of growth through to March this year.

"Total renovations hit a new quarterly record in March 2010", he added.

Improving labour market conditions and existing home price gains are forecast to see the total worth of the renovations sector increase by 7 per cent in 2009/10.

"Growth of 4 per cent is forecast in each of the subsequent two years, taking renovations activity to a worth of $36.4 billion in 2011/12", Dale said.

"The recovery in the renovations sector includes signs of growth in major alterations and additions which encompasses structural extensions, an important component of the overall housing industry", he concluded.