Australia’s inflation rate slowed to 3.5% in July 2024, marking the lowest rate since March, but the battle against inflation is far from over, particularly in the housing sector.
“Housing costs continue to put upward pressure on the inflation rate,” said Denita Wawn (pictured above left), Master Builders Australia CEO.
Rents rose by 6.9% over the year, and the cost of buying a new home increased by 5%.
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Wawn stressed the need to increase the supply of new homes, including rental properties, to ease inflationary pressures.
“A number of barriers continue to hamstring the industry’s ability to speed up the delivery of new homes,” she said, citing high building costs, labour shortages, and planning delays as key obstacles.
Construction activity data for the June quarter showed a slight 0.1% increase in the total volume of work done, driven by a 0.5% rise in civil and engineering projects. However, residential building activity declined by 2.9% over the past year.
“Residential building activity is down 2.9%... opposite of where we should be heading,” said Shane Garrett (pictured above right), chief economist at Master Builders.
Despite challenges in the housing sector, the civil and engineering construction sectors have been key to maintaining economic growth, with a 4.8% increase over the past year.
Garrett highlighted this growth as crucial for the economy, though the decline in residential construction remains a concern for the broader market.
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