MBA Confirm Strong Market

According to Master Builders Australia (MBA), the peak body for the building and construction industry, the Australian housing sector is entering an uncertain period but, despite this, the MBA believe there is nothing to suggest the market will experience a substantial crash.

Ongoing speculation about further interest rate rises and the impact of interest rate rises in November and December last year contributed to a slow down in housing activity.

In addition, the traditionally slower winter period and the fact that we are in the lead up to a Federal election have also had a dampening effect on the housing market, although these reasons are not enough to conclude we are in a housing free-fall.

In fact, the most recent building activity data from the Australian Bureau of Statistics (ABS) showed residential building activity was at its highest level since the June 2000 quarter.

The ABS statistics showed, on a seasonally adjusted basis, the value of all building work completed during the March 2004 quarter was $12.1 billion, a 0.6 per cent increase on the previous quarter and 3.8 per cent above the March 2003 quarter.

During the March 2004 quarter investment in residential building also increased by 2.4 per cent to $7.0 billion, 4.3 per cent higher than the March 2003 quarter.

Investment in alterations and additions fell by 0.6 per cent to $1.3 billion during the March 2004 quarter, although this level of activity was still 9.6 per cent higher than the same period last year.

Chief Executive Officer of Master Builders Australia, Mr. Wilhelm Harnisch, said while in both volumes and raw dollar terms building activity was at a record high, all indications are that a mild slowdown is now underway?

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