The Housing Industry Association, Australia’s largest building industry organisation, believes final figures released today by the Australian Bureau of Statistics confirm that new residential building activity began to recover in the September 2009 quarter.

The industry body remained cautious about the sustainability of the up-cycle, however, despite being confident that 2009/10 would be a healthier year for new residential construction.

“First home buyer-related activity, the Social Housing Initiative, and the lagged impact of very low mortgage rates will combine to generate growth in new residential work done in 2009/10,” HIA Chief Economist, Dr Harley Dale said. “It remains unclear, however, whether the recovery can gather legs beyond this year in the face of persistent supply side obstacles, rising interest rates, and what to date is an insufficient number of upgrade buyers and investors to fill the void left by first time buyers.”

Seasonally adjusted work done on new residential dwellings increased by 2.8 per cent in the September 2009 quarter to an annualised worth of $36.3 billion. This was 3.9 per cent down on the September 2008 quarter and over 9 per cent lower than the previous cyclical peak seen back in early 2004. Work done on detached houses increased by 6.5 per cent over the September 2009 quarter but work done on ‘other residential building’ dropped by 5.5 per cent.

Seasonally adjusted new residential work commenced in the September 2009 quarter increased by 5.8 per cent, the first rise since mid 2008.

The leading state for new residential work was Queensland, which reported a six per cent increase, while Victoria (3%) and NSW (2.8%) were also strong performers.