Housing starts near record lows

Western Australia’s dwelling starts are near all-time lows, with recent data showing the state recorded its second lowest commencements since 2020.

Australian Bureau of Statistics data released today shows there were 3,022 dwelling commencements in WA in the final quarter of 2023.

This represents a 12 per cent decrease on the prior corresponding period and a 36 per cent drop on 12 months prior.

It was the second lowest on record to June 2020, when 2,945 commencements were recorded.

WA’s completion rate is improving though, with 4,160 homes finished in the December quarter.

This is a slight reduction from the previous quarter (4,453), but a significant improvement on September 2022 when 2,798 homes were finished in WA.

Nationally, dwelling starts were 38,397, up by 1.3 per cent on the previous quarter, and completions were at 43,068, up from 42,820 the prior quarter.

Housing Industry Association WA executive director Michael McGowan said the commencement data reflected the challenging environment builders faced at the start of 2023.

“Uncertainty around build costs, construction timeframes and interest rates impacted consumer confidence and new home sales,” he said.

“It takes six months from a sale to the job commencing on site [and] as a result of this delay these numbers are not unexpected.”

Mr McGowan added that building approvals had steadily increased since October 2023 and HIA expected this volume to be reflected in the 2024 data.

Property Council of Australia WA Division interim executive director Emily Young  said navigating a tough market demanded creative solutions.

“With rental options scarce, borrowing costs high, and construction times extended, it is unsurprising that we have been consumers turn their attention to the established market,” she said.

“But to meet our future housing demand, it is imperative that we support innovative housing solutions that will maintain the pipeline of new homes and prevent further regression."

She said build-to-rent projects, which recently received a tax incentive from the federal government, were a key part of addressing the housing crisis.

“But burdensome tax policies, especially land tax, impede the potential of this housing type from being delivered at scale in WA,” Ms Young added.

Master Builders of Association of WA’s industry forecasts, released this week, predicted WA was set to fall 15,000 home short of its national target.

The organisation has forecast 114,620 home starts in WA from July 1 this year to June 30 2029.

“The biggest challenge industry faces remain with the workforce shortages, and the impacts of industrial relations changes cannot be overstated,” MBAWA chief executive Matthew Pollock said.

“What these forecasts show is that capacity constraints in the industry are going to mean we fall short of the Federal Government housing targets.

“At a Federal level, the government’s priority should be growing the building and construction workforce and not making industrial relations reform which make it hard to build homes.”