November 07, 2011
PLUMMETING demand for new houses in Melbourne will continue in coming years as most of Australia emerges from a slump, economic forecaster BIS Shrapnel says.
The revelation comes as Westpac chief Gail Kelly says the expected boost in spending from last week's Reserve Bank rate cut could go straight to consumers' savings accounts.
"What will happen is that customers will take the extra cash that they've got and probably apply it more to debt repayment and to savings," Ms Kelly said.
BIS Shrapnel's Outlook for Residential Land 2011 to 2016 report said lot production in Melbourne's growth corridor outer suburbs had decreased after peaking at 18,900 lots in 2009-10, with analysts now saying those boom years were unsustainable.
Report author Angie Zigomanis says production dwindled to 17,700 lots in 2010-11 and predicts this will decline to as little as 13,000-15,000 lots per annum by 2013-14.
"While this is well down on ... recent years, it reflects the unsustainable level of activity that has taken place," Mr Zigomanis said.
Article by Jeff Whalley From:Herald Sun