Today’s GDP figure reflects the impact of the slow-down in housing construction activity on the Australian economy.
The June quarter GDP grew by 0.5 per cent with growth of 1.4 per cent over the year. However, dwelling investment fell by 4.4 per cent in the June quarter, and was down by 9.1 per cent over the year. This led to a 0.2 percentage point subtraction from the June quarter GDP result.
“We’ve been highlighting the potential impact of a slowdown in housing construction on economic growth for some time, and this is now clearly showing up in the June quarter GDP result,” said Ken Morrison, Chief Executive of the Property Council.
“Recent signs that housing prices are stabilising are welcome and important for consumer confidence, but housing construction is the critical driver of investment and jobs and this is falling.
“The housing construction pipeline is constricting, with building approvals down 24 per cent over the past year.
“Stronger housing prices may lead to a turn-around in construction activity down the track, but the current reality is that construction is slowing and that will weigh on economic growth and employment well into 2020.
“These are the dynamics of the housing markets that must focus the minds of policy-makers across all levels of government.
“The biggest issue remains access to finance for purchasers and there is a need to continue to focus on this pressing issue.
“We also need a plan to mitigate against the risk of future shortages in supply and the consequences for housing affordability.
“In this environment, state and territory governments have a big responsibility to ensure that their tax, planning and land supply policies are tuned appropriately – and in many cases they are not,” Mr Morrison said.
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