Housing slump looms

WA may have escaped the explosion in new building as felt in New South Wales or Victoria, but economic forecaster BIS Shrapnel has warned investors that WA housing is heading for a sharp decline in the next year.

The latest Building Industry Prospects released on Monday by the forecaster, points toward a 17 per cent decline in WA to the year ending June 30 2002.

This is a consequence of the strong, arguably premature, recovery in 2001-02 when dwelling commencements rose 38 per cent and led to a surplus in houses.

The sharpest declines around the country will be in Tasmania, which is undergoing a mini-boom, South Australia, WA and the Australian Capital Territory.

Only the Northern Territory market will improve.

With a 17 per cent decline, the WA market will suffer a greater loss than that in New South Wales, where a 14 per cent de-cline is expected. The market in Tasmania, which had a 74 per cent increase in new house commencements in the past financial year, will fall 35 per cent in the current financial year.

Building approval numbers from the Australian Bureau of Statistics are giving an ominous sign of things to come as a barometer of future dwelling starts.

In August, approvals in the State fell 9.8 per cent seasonally adjusted, and have managed just 2.4 per cent growth in the past year.

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