Melissa Fraga and I attended the 2019 HIA Queensland Industry Outlook Breakfast held at the Brisbane Convention Centre this morning.
As two passionate specialist Recruitment Consultants in the housing industry, we were eager to find out from the experts where it is all headed, especially off the back of a sharp dive in the market in December of last year. Below we will provide some insight into the information that was shared.
For some time now we have known that economic growth in Australia has been driven by the housing industry. Due to varying factors - one of the biggest being lending - banks are now only approving an average of 50% of applications. The industry is now going from a peak back to what is said to be average levels. In December of 2018, there was a sharp decline in building approvals, but the good news is that it has a shallow impact for now.
Tim Reardon, Chief Economist from HIA stated that Home Ownership is more important to the consumer than Environment and Immigration. Not sure if that blew your mind but it did ours!
Factors Impacting in 2019
- Global economy underperforming
- Credit squeeze impacting new home building
- Population growth is slowing
- Market confidence is a significant challenge
- Consumers have no FOMO
- Quality of builds
- Macro indicators are strong;
- GDP is solid
- Unemployment is very low
- Slow wage growth
As Tim Reardon said there is a lot to like –
- Resource boom-bust cycle is behind us
- Public sector investment has grown
- Low-interest rates are supporting business investment
- Signs of improvement in non-mining business investment
- Labour market conditions are improving
- Population continues to grow
In summary, the home building industry has driven the Australian economy for five years. We are now reliant on other sectors of the economy. The outlook is sharp with a shallow downturn. The last decade of growth was in spite of Politicians and the next decade will be because of them.
Every industry has its ups and downs and will do many times through its life cycle, it’s how you manage it and sustain your business through it, that counts!
As Lord Mayor Graham Quick stated in line with their 2041 local government plan the focus will now be in Civil Construction/Engineering and Infrastructure sector.