While I think the Housing Industry Association (HIA) has some top-notch economists, the Industry Roundtable Communique it issued today is overly pessimistic:
It was agreed that the housing industry is currently facing the worst conditions in decades and a lack of action by all levels of government is constraining the ability of Australians to access affordable housing.
Further, the current environment is having negative implications for job security in residential building and related sectors.
Industry leaders are united in calling for urgent action from government of all levels to address the dire levels of housing supply in Australia.
This should include immediate investment to promote building activity, and reform measures to improve productivity and reduce taxation in the medium and longer term.
This has come on the same day as BIS Shrapnel has released credible forecasts that the industry is set to recover later this year, particularly in NSW, Queensland and WA, as reported by Peter Martin today:
Australians are strongly attached to the idea that owning a home and/or an investment property is the key to financial security and wealth, and I have no doubt the building industry will recover strongly over the remainder of 2012, particularly in Queensland and WA as the dollars from the resources boom wash through the economy.
That said, the HIA is right to call for taxation reform, particularly cutting stamp duty, which is a very inefficient tax, as I’ve discussed previously: