Market forecasts for building boom prove way off
BUSINESS analyst BIS Shrapnel has downgraded its estimates for a Grafton-Coffs Harbour led building revival.
Twelve months ago the forecasting agency predicted building starts in the area would boom by 52%, making it the fastest growing in Australia.
While the 29% growth is not too shabby, it is a long way off the predicted figure, prompting the experts to say it was taking longer than expected to materialise.
In the report Regional Building 2014-2016 the forecaster analysed trends and prospects in demand and supply for residential and non-residential building in regional areas.
At the top of the league table are several regions on the NSW North Coast, such as the top placed Richmond-Tweed, forecasted to see home building grow 46%, and Mid North Coast above 46%.
These regions tend to have an older age profile, and have a significant lifestyle and retiree component to demand.
After the Global Financial Crisis (GFC) home building in these areas dropped, and now they find there is an undersupply of homes.
Growth will accelerate in 2014/15 and beyond, taking activity back towards pre-GFC levels.
Grafton-Coffs Harbour has fallen to number six on the league table.
BIS Shrapnel associate director Kim Hawtrey made no bones about the reasons behind the variation in figures.
"We have a theory about words like 'global' and 'macro'. They're over rated, especially when it comes to bricks and mortar," he said.
"The fact is, building always happens at a particular postcode. And no two postcodes are the same.
"Take the umpteen local regions sprinkled across Australia, for instance. Some geographical pockets are set to win big from the home building boom in 2014/15, while others will record declines - in some cases dramatic declines."