Tag Archives: economics
New home building in Australia reaches 20 year high
New home building in Australia has reached a 20 year high, heralding a recovery in the industry, according to the Housing Industry Association (HIA), the voice of Australia’s residential building industry. According to HIA senior economist, Shane Garrett, back in early 2012 when activity was so low, the prospect of breaking through 180,000 starts within a couple of years was beyond almost everybody’s most optimistic expectations. But the latest figures from the Australian Bureau of Statistics are not all good news as the multi-unit dwelling segment saw a sharp fall during the second quarter of this year, with detached house building also nudging down a little. On the renovations side, the volume of work done also fell, with a 3% reduction in activity during the June 2014 quarter. But overall new housing starts totalled 45,527 in seasonally-adjusted terms. Despite representing a 6.9% decline on the previous quarter, these figures mean that total starts during 2013/2014 was 180,833, the highest 12 month total since March 1995. Detached house commencements slipped by 1.1% during the quarter while other dwellings saw a 15% slide in seasonally adjusted terms. The new HIA Economics report Housing Australia’s Future estimates that about 186,000 new homes will be required annually between now and the year 2050. ‘Even in such a strong upturn, we are still short of this requirement today. This is a stark illustration of the serious supply side issues which will need addressing,’ said Garrett. ‘A number of factors continue to plague the capacity of the new home building sector. These include high taxation, stamp duties, planning restrictions, and delays in making residential land available,’ he explained. ‘Failure to tackle these constraints will mean that the ability of the industry to provide for Australia’s long term housing requirements will continue to be seriously undermined,’ he added. A breakdown of the figures show that new home starts in the June quarter fell by 12.3% in New South Wales, by 3.3% in Victoria, by 1.3% in Queensland, by 1.7% in South Australia and by 48% in the ACT. Three states saw building commencements rise during the quarter. They were up 2% in Western Australia, by 28.7% in Tasmania and by 18.3% in the Northern Territory. Continue reading
UK house prices set to fall in 2015 after rising too much this year
UK house prices are set to fall next year as price growth as got ahead of itself in 2014, but they will start rising again in 2016, according to a new analysis. According to the Centre for Economics and Business Research, house prices are about to hit a turning point. It’s report says that so far 2014 has seen largest rise in home values since the Prices this year are expected to rise by 7.8%, more than double the 3.5% national average increase last year. But now young buyers risk being priced out of the rising market, while an expected rise in interest rates will ‘startle’ prospective home owners, the report says. Scott Corfe, a director at the CEBR, pointed out that leading indicators already point to price declines in some parts of the UK, alongside falling new buyer enquiries and properties staying on the market for longer before they sell. ‘Affordability has become such an issue in the more expensive regions of the UK that buyers are starting to baulk at high prices. New mortgage rules, introduced in April, have also led to a slowdown in lending that will ‘curb demand for property in the short term’, he said. A rise in interest rates from the Bank of England next year is also expected to cool house price growth in the short term. ‘Although rises are expected to be very gradual, with rates remaining much lower than before the financial crisis, prospective buyers are likely to be startled by the first such increase, leading many to hold off from making purchases. This too will lead to lower prices,’ he explained. But he stressed that the CEBR is not anticipating a crash as the market is adjusting after getting ahead of itself at the start of 2014. It predicts that, after slipping in 2015, prices will start to rise again, growing by 2.6% in 2016, 3% in 2017 and another 2.7% in 2018. Howard Archer, an economist at IHS Global Insight, has previously said he expects house prices ‘to rise at a more retrained restrained rate over the coming months’. Continue reading
Panel Discusses Wood Biomass Sustainability, Coming Regulations
By Tim Portz | October 30, 2013 Nigel Burdett, head of environment at Drax Power, addresses the audience at the U.S. Industrial Pellet Association’s 3rd Annual Exporting Pellets conference. Tim Portz. . . Nigel Burdett, head of environment at Drax Power, kicked off a panel discussion at the U.S. Industrial Pellet Association’s 3rd annual Exporting Pellets Conference, by commenting on the role of sustainability in the transition from coal to wood pellets. “We need to be sustainable in order to capture the subsidy and make the business work,” he said. The panel focused on the sustainable attributes of renewable power produced via wood pellet combustion. The subsidies Burdett spoke of are Renewable Obligation Certificates (ROCs) issued by the U.K. Office of Gas and Electricity Markets. These ROCs are financial instruments that power generators can sell on the open market, boosting the economics of generating renewable energy. In September, the U.K. Department of Energy and Climate Change confirmed that biomass would play a significant role in the march toward the de-carbonization of the U.K. energy sector, but that biomass burned by its power generators must come from sustainable sources if those generators expect to receive ROCs. While final rulemaking has yet to be established by the DECC, power generators in the U.K., pellet suppliers in the North America and elsewhere, and the loggers and landowners that supply biomass to pellet facilities are all preparing for the coming legislation. They are also offering their perspective to policymakers on what they feel are realistic, yet adequately stringent, requirements. At the same time, a larger, more expansive effort is underway to frame up for the general public the vital role that biomass-derived power can, and should, play in driving geologic carbon out of the world’s energy mix. Geologic carbon, the carbon found in fossil fuels and sequestered there for millions of years, is released into the atmosphere when it is combusted for energy. Bob Malmsheimer, professor at the State University of New York College of Environmental Science and Forestry, urged attendees to recognize the inherent differences between geologic carbon and biogenic carbon saying, “When we make products and energy from biogenic carbon instead of geologic carbon, we’ve done something positive for climate change.” Recognizing that the public is continually presented with different studies and models, he continued by stating, “While the timing aspect is debated, the long term benefit is not debatable.” Echoing Malmsheimer’s comments, and diving deeper into an explanation of the science as well as many of the reasons for widespread confusion about the issue, was Martin Junginger, assistant professor at the Copernicus Institute for Sustainability Development at the University of Utrecht. Junginger pointed out that many of the studies that industry critics use to question the sustainability of woody biomass are flawed because they investigate the carbon cycle at a stand level, as opposed to looking at the carbon cycle in the context of a broader forest ecosystem. “Scientists have realized that looking at the landscape of level is the most appropriate,” said Junginger. He explained that if 1 acre of land is converted into biomass feedstocks and burned, there is carbon released into the atmosphere certainly, but that the overall forest system was taking up more carbon as a whole than was being released during the combustion of a percentage of that biomass during energy generation. The panel concluded the discussion by driving home the point that the worst-case scenario for global forests were declining markets for forest products, including woody biomass for pellet production. Repeating an argument that is continually being made by the largest forest owner associations in North America, including the National Alliance of Forest Owners and the Forest Landowners Association, the panel argued that strong markets for all grades and types of forests was the best way to stave off the largest threat to forests, emerging higher economic values for forested acres, including redevelopment. Recognizing that proving the sustainable nature of their supply chains will be a vital aspect of Drax’s business, Burdett underscored the importance of preparing for the coming feedstock tracking requirements saying, “We are going to see a great deal of data being required of suppliers,” and stressing that non-compliance ultimately would cost Drax the most. “We have canceled contracts because adequate data was not available,” he added. Continue reading
