Australian housing recovery will "spread wings" this year

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The HIA's latest report shows predicts that residential construction investment will account for a growing share of the economy in 2014, with the housing industry marking one of the country's good news stories in the next 12 months.

“New dwelling commencements are forecast to break the 165,000 threshold for only the second time in a decade,” explained HIA Senior Economist Shane Garrett. “This will be driven by much stronger activity in markets like NSW, Queensland and Western Australia. However, challenges will remain in other states, more notably Victoria and Tasmania."

THe HIA forecasts that the RBA will leave its interest rate unchanged for the remainder of this year at least, which will underpin strengthening activity in housing and arrest the deterioration in housing undersupply experienced over the past decade.

Housing starts increased by 11.7 per cent to 161,970 during 2012/13, following two consecutive years of decline. Activity is forecast to rise again in 2013/14 by 2.8 per cent, going on to reach over 170,000 by 2016/17.