Housing slowdown eats into GDP
The housing market has proven a drag on GDP growth.
Australia’s GDP grew by a sluggish 0.3% in the March quarter, with a decline in housing investment eating into growth. The weak result shows housing activity has peaked, HIA senior economist Shane Garrett said.
“Investment in new housing fell by 4.4% in the March quarter 2017, which brings the sector down from record high investment in December 2016 and back to levels similar to those experienced at the start of 2016,” Garrett said.
But Garrett said the housing slowdown was inconsistent from region to region, with metropolitan areas still showing signs of strong activity. He also argued that poor weather contributed to the weak result over the quarter.
“There is still a significant volume of work that remains to be done on projects at various stages of construction, which is expected to see the level of investment remain close to a historically high level over the next few years,” Garrett said.
Garrett also said apartment construction remained strong, with a record number of apartments still being constructed.