Builder confidence on the rise

Builder confidence on the rise

Posted on Friday, May 18 2012 at 11:25 AM

Sentiment in the building industry is on the up and expected to be more positive over the next 12 months, according to The Citi Australian Residential Housing Survey – May 2012.

The survey, which
questioned builders across Victoria, New South Wales, Queensland and Western
Australia, paints a more optimistic picture for the coming year.

“Sentiment was
more positive than we anticipated, given the low consumer confidence, with
government policy/leadership and economic conditions the biggest causes for
concern regarding activity levels,” the survey says.

“Fifty six per
cent of the builders reported an improvement in their order book versus six
months ago. Forty per cent of respondents were confident about activity levels
in residential housing over the coming 12 months, while only eight per cent had
a negative view.

none of the respondents were worried, which was again a better-than-expected

However, the
survey adds the new carbon tax is an issue that worries builders and the costs
will likely be passed onto consumers.

“Carbon tax looks
to be the driver of inflation, with 51 per cent of respondents intending on
increasing prices by up to five per cent and a further 27 per cent by up to 10
per cent plus.

“Builders seeing
cost increases of more than five per cent are likely to increase their prices
by a similar amount, potentially implying some margin expansion. While 75 per
cent of respondents expected costs to increase up to five per cent, only 50 per
cent of respondents expect to increase prices by up to five per cent,
suggesting these builders may be happy to accept lower margins to maintain

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