Housing holds up WA economy

WA IS holding up well thanks largely to a healthy housing sector which saw another strong quarter of growth.

This was the finding from the Westpac Group’s June quarter 1999 Market Insights report.

During the March quarter, house approvals increased by 2.6 per cent, up 15.4 per cent on a year ago.

The units market rose five per cent although it was down eight per cent from the 1998 March quarter.

According to Market Insights the units market is unlikely to peak in the near future.

Housing finance also rose by 2.7 per cent to be 6.1 per cent higher then in the 1998 March quarter.

Challenge Bank’s index of house-buying sentiment remains historically high.

This index shows WA remains the strongest performing state when it comes to buying a house. WA is sitting at a level 34 per cent higher than in the June quarter last year, compared to the national house buying sentiment which is up only 22 per cent on the June quarter last year.

The Westpac index of WA housing affordability for established houses dipped in the March quarter as a result of a surge in established house prices (up 2.3 per cent).

The affordability of new houses increased slightly to reach a new record high.

“The gap between [prices of] established and new houses continues to widen and this will push buyers into new houses and place a constraint on established house price rises,” the report said.

Westpac economist Harley Dale says the current situation of high buyer sentiment and affordability is unlikely to change significantly in 1999.

“Aided by the pre-GST boost to activity in the second half of the year we expect to see further upward momentum in the housing sector in WA through the remainder of the year,” Mr Dale said.