SLOWDOWN ON THE CARDS FOR AUSTRALIAN HOUSING INDUSTRY.

SYDNEY, Feb 1 Asia Pulse - Housing construction isn't about to fall in a heap but a slowdown over the next couple of years is on the cards, the Housing Industry Association (HIA) said Monday.

After three strong years the housing sector is set to ease its robust growth until a pick-up in building activity around 2007, according to the December quarter edition of the HIA National Outlook report.

HIA senior economist Harley Dale said residential housing activity should remain "reasonably healthy" over the next couple of years.

"Economic growth, while slowing, won't fall off a cliff, the unemployment rate is historically low, which is very important to the housing sector, and there hasn't been the overbuilding of previous cycles," Mr Dale said.

"In this kind of environment a moderate correction to housing activity is on the cards.

"Forward indicators for the sector, together with our own survey research, continue to point to this situation dropping out over the next couple of years."

The HIA report said residential construction appeared to have peaked in the September quarter of 2004 but any coming correction should be restrained.