Fundamentals forecast to drive strong recovery from 2013-14, growing by 11% to reach $17b.
A very strong recovery is expected in the New South Wales residential sector, forecasting an end to the residential slump from 2013, followed by five years of sustained real growth. This is driven by demographic pressures and localised undersupply issues. In comparison, in Victoria the opposite holds, and is a story of localised undersupply following five strong years of residential construction.
With the growing number of people who have sought to buy a new dwelling in NSW, the recent policy initiatives to improve housing supply, and continued population growth are all expected to result in a solid pick-up in housing investment over the medium term. In particular, a number of private sector economists are forecasting housing investment as a share of GDP to return to its long-run average level over the next 5 years. This is positive news for the NSW residential housing market and owner builders.