1. The Outlook for Australia’s Residential Construction Industry Housing Australians The Outlook for Australia’s Residential Construction Industry Graham Wolfe HIA Chief Executive – Industry Policy & Media 20 September 2012

2. Population Growth – Australia

3. NET OVERSEAS MIGRATION - NSW

4. New housing starts in New South Wales

5. NET INTERSTATE MIGRATION - NSW

6. POPULATION GROWTH - NSW

7. MOVING ANNUAL TOTAL - NSW

8. NET OVERSEAS MIGRATION - VICTORIA

9. POPULATION GROWTH - VICTORIA

10. MOVING ANNUAL TOTAL - VICTORIA

11. NET INTERSTATE MIGRATION - QUEENSLAND

12. MOVING ANNUAL TOTAL - QUEENSLAND

13. POPULATION GROWTH - AUSTRALIA

14. Gap between population growth and new stock

15. The world is a worry Europe is a basket case, but … … it’s finding a way to muddle through. Confidence, credit, and exposure for East Asia are the key linkages to Australia. Updates on the US economy are patchy One recent, large, positive – the housing market seems to be recovering China holding up “okayish”? China has slowed, and there are some concerns, but… … these concerns still look over-played. East Asia in general is slowing down and the focus is here to stay for a while.

16. The Australian Economy – how good are we?

18. The good, the bad, and the ugly

19. Let’s get the ugly out of the way …

20. The ugly: Housing starts are heading in the wrong direction, and...

21. ... it’s a synchronised downturn and …

22. … renovations are also sliding Renovations investment has fallen over four consecutive quarters.

23. The bad: consumers are unsure and nervous

24. The good and bad: easing dwelling prices Do we really need to scare the living daylights out of people?

25. Median Dwelling Price 17% Interest rate 6% Interest rate Unemployment 8.5% Sydney is FULL! and GST commences 4.25% Interest rate 6.9% unemployment 4% unemployment Baby boomer FHB aged children Baby boomer investors GFC-induced stimulus Infrastructure levies surge

26. The good and bad: falling interest rates Are we at the end of the line?

27. The good: housing affordability is improving

28. The good: some indicators are turning

29. The good: no shortage of potential

32. So what does the future hold?

33. Short term housing starts outlook

34. The short term outlook for renovations

35. So, what now? There remain many short term challenges to residential construction, … … both new home building and renovations. The renovations model is changing and that brings opportunity. So too does state governments realising things have to change on the new home building front. People will adjust to the ‘new world’ for housing prices and with that will come opportunity as well. Australia’s housing backyard needs work and HIA will keep up the fight. The key challenge is uncertainty around when we will see ‘the turn’.

36. THANK YOU FOR YOUR TIME Graham Wolfe HIA Chief Executive – Industry Policy & Media September 2012