New home building in Western Australia is set for a strong recovery, driven by the recent increase in first home owner grants and record low interest rates, a housing industry lobby group says.
The Housing Industry Association released its latest WA state outlook this morning, which predicted home construction would remain at high levels for the foreseeable future, while renovations activity is also expected to experience significant growth in 2013 and 2014.
New housing starts rose by 2.1 per cent in 2012, to reach 20,192, with the HIA expecting this to grow by around 19 per cent in 2013.
Dwelling starts are expected to ease by 1.5 per cent in 2014, to reach around 23,600.
Acting HIA executive director John Gelavis said the association’s biggest concern was that land supply may not be able to meet strong demand for new home building.
“Shortages are also emerging in skilled housing trades,” he said.
“It is important that these issues receive the attention of the state government.”
Nationally, the HIA said a new home building recovery was at risk of running out of steam, with strength in WA and NSW offset by weakness in other states.
Housing starts increased by 8.3 per cent nationwide last financial year, to 157,108.
The HIA is expecting starts to fall by 4.2 per cent over 2013-14.
“There is not enough policy focus on housing reform at a state as well as federal government level,” HIA chief economist Harley Dale said.
“Consequently, a new home building recovery looks set to be stopped in its tracks.
“Such an outcome would be detrimental to an improvement in housing affordability, a faster pace of economic growth, and a lift in the nation’s productivity performance.”