Housing Industry Association

The Hon. D.W. RIDGWAY (15:07): My question is to the Treasurer. I think this morning the Housing Industry Association had their annual business outlook function, so can the Treasurer please outline to the chamber what the HIA's views are on the state of the South Australian housing market?

The Hon. R.I. LUCAS (Treasurer) (15:07): The Housing Industry Association outlook function annually has Mr Tim Reardon, who is the HIA chief economist, come across from Canberra to provide commentary about the local housing market and the national housing market, and it's always very useful and very informative in terms of the challenges ahead for the sector. I think everyone acknowledges the housing sector is a critical sector in terms of the state's economic recovery and, as I said, Mr Reardon's views and the HIA's views are important indicators in relation to the challenges ahead.

It was a very informative presentation this morning from Mr Reardon, and if I could just share with members some of the takeout from his particular presentation today. What he did indicate was that, from the HIA's viewpoint, for the 12 months to September 2020, for single detached housing approvals in South Australia compared to the 12 months to December 2019, there had been a 5.5 per cent growth in the single detached housing approvals.

That's critical because the challenges of, in particular, the 12 months to September 20 obviously include at least six or seven months since the onset of the COVID-19 pandemic. The mere fact that both commonwealth and state housing policy, but in particular in the latter months there the impacts of HomeBuilder, which Mr Reardon spoke about at length, are apparent in terms of the latter part of that 12-month period.

In terms of total dwelling approvals, the number of units or townhouses has declined over the similar period, but in terms of total dwellings we saw an increase of 2.3 per cent in the building approvals market in South Australia, which is an important indicator in terms of where we are heading.

Secondly, in terms of the other measure of housing activity, which is housing start forecast, the HIA's forecast for the future, Mr Reardon outlined for South Australia that in the financial year 2018-19, just two years ago, we had a total of around 7,300 dwellings commence in South Australia. He and they are predicting for 2019-20, the year just gone, an increase to 7,800, so that takes in the last three months of that financial year, which was impacted by COVID-19, but nevertheless still an increase of 500 in terms of housing start forecasts. He is predicting for this year, 2020-21, a massive increase to a 9,300 housing start forecast, a massive increase of 2,000 housing start forecasts, comparing this financial year, 2020-21, with just two years ago, 2018-19.

As we move beyond the peak of HomeBuilder, he is predicting returning to the 2018-19 level of 7,400 in 2021-22. As we outlined in the budget, the government has allocated $75 million in terms of housing stimulus, which we believe we need to bring to the industry sector as HomeBuilder wanes in terms of its impact on the market, so the $70 million of stimulus the government has allocated in the budget will need to be brought to account in the 2021-22 year as we seek to sustain housing activity in South Australia beyond the impacts of HomeBuilder.

Just quickly in terms of the health of the market, in terms of house price changes in home values in Adelaide in the year to November 2020, year on year, we showed a 5.3 per cent increase in home values in Adelaide compared with negative 0.9 per cent in Melbourne, compared with 3.2 per cent in Brisbane, 3.7 per cent in Sydney and 0.8 per cent in Perth—a massive 5.3 per cent increase in home values in the 12 months to November 2020 compared with the 12 months to 2019.

Finally, in terms of the health of the rental market in South Australia, and the tightness of the rental market, Mr Reardon shared some figures for year on year to September 2020, where rental vacancy rates in Adelaide were only 0.8 per cent compared with 2 per cent in Brisbane, 3.8 per cent in Melbourne and 3.5 per cent in Sydney. That is showing a pretty tight rental market, and that is why it is important in terms of encouraging, in particular, further investment in the housing sector from the private sector viewpoint, but also the government will continue to do its part, in particular as HomeBuilder wanes through its stimulus package towards the end of calendar 2021.