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Building shortfall to continue
Released 5 July 2011

A big fall in building approvals in May highlights the tenuous outlook for many parts of the industry, according to Master Builders Australia (MBA).    

Building approvals fell 7.9 per cent, much worse than the 0.5 per cent decline expected by economists.

MBA Chief Economist Peter Jones said a much anticipated upswing in residential building activity remains in doubt as householders remain cautious and fearful about further rate rises.

“Non-residential building indicators remain soft as the industry loses the cushioning effect of government stimulus programs.
He said the latest figures are in line with Master Builders’ latest June quarter survey that shows builders concerned about a lack of private sector demand to compensate for reduced public demand as BER and other programs wind down.

“Given the underbuilding of the past seven years, approvals need to lift by half if the level of residential building is to make any inroad into an ever-increasing supply shortage.”