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Mining area building rate to slow: report

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The slowing of the mining boom and public sector cuts will lead to a dramatic drop in the number of new homes being built in parts of Australia, according to a new report.

However, localised population increases mean some pockets are set for a building boom, the report also found.

The BIS Shrapnel Regional Building 2013-2015 report identified the Coffs Harbour-Grafton area on the north coast of NSW as the No.1 growth area for new dwellings next year with a forecast increase of 52 per cent for 2013/2014.

Alice Springs will experience the biggest slow-down in new buildings, with annual commencements expected to drop by 43 per cent over the same period.

Western Australia’s Pilbara and Kimberley region will also slow significantly by 36 per cent and 22 per cent respectively.

Major investment in the Pilbara had driven strong employment and population growth until recently, the report found, however it said this was unsustainable.

Building activity in the Pilbara and Kimberley regions is expected to remain high by pre-mining boom standards.

The nation’s southeast corner will endure some of the most significant drop-offs in new building rates.

In Victoria, areas hit by recent factory closures such as Geelong and Hume will sustain a drop of a projected 11 per cent each.

The ACT will see a 32 per cent reduction in new dwellings as public sector jobs are cut, the report said.

The report said the Coffs-Harbour Grafton area had a significant lifestyle and retiree component and other “lifestyle” areas are expected to increase.

These include Wide Bay (projected to be up 16 per cent in 2013/2014) and Toowoomba (up 12 per cent) in Queensland.

BIS Shrapnel associate director Kim Hawtrey said after the Global Financial Crisis home building in the Coffs Harbour-Grafton region dropped, an experience shared with many similar destinations.

“We now find there is an undersupply of homes,” Mr Hawtrey said.

He said the report found growth would return to areas such as Coffs Harbour-Grafton in 2013/14 and beyond.

“Low interest rates, a friendlier exchange rate and improving confidence will drive increased building activity,” Mr Hawtrey said.

Western Australia’s Wheatbelt is forecast to grow by 29 per cent as new building numbers drop in mining regions.