The Housing Industry Association is forecasting Australian housing starts will rise by 9.6 per cent this year, peaking at 184,300 dwellings.
It comes as capital city house prices continued to grow, up 1.8 per cent in the three months to June, with Sydney the best performer according to the Australian Bureau of Statistics.
HSBC Chief Economist Paul Bloxham expects house price growth will continue.
He doesn't expect a rate rise until the first half of next year. Until then, more people are expected to pour more money into home renovations, lifting the number of home improvements from a decade low in 2013.
The home improvement market is worth around $45 billion, with Bunnings taking a 17 per cent share of the pie. The forecast increase in renovations is good news for Woolworths-owned Masters if it can capitalise on the predictions. It has been trading at a loss, and today told the market that it doesn't expect to meet its previous guidance of breaking even by 2016.
