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Housing prospects for 1994-95 and 1995-96



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Chairman: Chris Caton Secretary: Dorothy Hume

Telephone: (06) 289 2325 Facsimile: (06) 289 2113

Secretariat: Department of Housing and Regional Development GPO Box 9834 Canberra ACT 2601

4 May 1995

HOUSING PROSPECTS FOR 1994-95 AND 1995-96

The Chairman of the Indicative Planning Council for the Housing Industry (IPC), Dr Chris Caton, today released the IPC's Housing Prospects Quarterly Report Vol. 1 No. 2, which contains the IPC's assessment of expected residential activity for 1994-95 and 1995-96.

The report contains revisions to the IPC's forecasts of housing industry activity contained in the IPC's Annual report released in October 1994 and repeated in the January 1995 Housing Prospects Report, in the light of recent activity in the housing market.

The IPC now forecasts a decline in dwelling commencements from the record high of 177,900 in 1993-94 to 164,000 in 1994-95 and 130,000 in 1995-96.

"The revisions are due to dwelling activity in the September and December quarters of 1994 continuing at high levels, resulting in expectations of lower activity in 1995-96 in response to oversupply," said Dr Caton

The IPC acknowledges more than usual uncertainty regarding the extent of the decline in commencements in 1995-96. A continuation of good economic growth could lead to a somewhat smaller decline, although the forecast of 130,000 still appears to imply an excess of supply of dwellings overall at June 1996.

The oversupply is concentrated in specific market niches, such as medium-density dwellings in some urban areas. Previous pent-up demand has been exhausted by the high levels of activity since 1992.

Dr Caton said the Council had recently revised its estimate of underlying dwelling requirements upwards to an average of 147,000 per annum over the five years to 1998-99. The increase is principally the result of revised assumptions for net gains in overseas migration to Australia over the period, to reflect higher observed trends.

The expected decline in commencements during 1995-96 would result from activity returning to levels more consistent with underlying demand.

Dr Caton said more detailed reports on industry conditions and prospects in each State and Territory will be released by the respective Chairs of IPC State/Territory Committees.

A full annual report will be published by the IPC in October 1995, containing forecasts for 1995-96 and 1996-97.

Further Information: Dr Chris Caton, Chairman IPC (02) 259 3520 Ms Anne Fitzsimmons, A/g Secretary IPC (06) 289 2325