A sharp drop experienced in housing investment this quarter confirms that housing activity has passed its peak, according to the Housing Industry Association.
Their research suggested investment in new housing fell by 4.4 per cent in the March Quarter 2017, which brought the sector down from record high investment in December 2016 and back to levels similar to those experienced at the start of 2016.
“A decline in investment in housing last quarter is consistent with other indicators that activity is decelerating in the sector," HIA Senior Economist Shane Garrett said.
"This trend is not consistent across the economy as some regions, particularly metropolitan areas, continue to show strong activity.
“Quarter by quarter fluctuations are expected and poor weather did contribute to the weak result in the March 2017 quarter."Mr Garrett said there was still a significant volume of work that remains to be done on projects at various stages of construction which is expected to see the level of investment remain close to a historically high level over the next few quarters.
“In the context of the residential building cycle cooling off a record high, investment in apartment building is holding up with a record number of new apartments still being constructed," he said.
"This is helping to meet the strong demand in the housing market.
“Residential construction, augmented by the substantial multiplier impact of industry activity through to the broader domestic economy, has been a mainstay of Australia’s economic growth during the last four years. It has been a strong driver for economic growth."A decline in housing investment and a decline in exports were reportedly the major factors contributing to the relatively subdued growth in the economy this quarter.
In seasonally-adjusted terms, GDP increased by 0.3 per cent during the March 2017 quarter and was 1.7 per cent higher than the same period a year earlier.