The Housing Industry Association is projecting an improvement in Western Australia’s home building market by the end of this year, citing an increase in population, building approvals and private house sales as cause for optimism.
The Housing Industry Association is projecting a strong improvement in Western Australia’s home building market over the next two years, citing an increase in population, building approvals and private house sales as cause for optimism.
The HIA has forecast the total number of dwelling commencements will bottom out this financial year at 15,000, before increasing over the following year to 19,460 in 2020-21.
That is based on an expected 21.5 per cent increase in commencements for detached dwellings to 13,900 and a 53.1 per cent increase in new apartments and units to 5,560.
Commencements are further expected to increase in 2021-22, with 14,500 new detached dwellings and 6,500 new apartment and units.
Those estimates are more bullish than those released in November by the Housing Industry Forecasting Group, which offered a far more subdued estimate of between 16,000 and 18,000 commencements overall by 2022.
“After more than five years of declines, the West Australian home building industry is starting 2020 with a much brighter outlook,” said HIA executive director Cath Hart.
While today’s data reflected a positive outlook for WA’s house building market, Ms Hart acknowledged that ongoing travel restrictions with China may yet influence HIA’s forecasts.
Still, she said factors such as improving rental prices, declining vacancy rates, larger loans for first-time homebuyers and a push for infill and higher density development in Perth would support WA's market.
“Things are finally looking up for home building in Western Australia and we’re confident about seeing a slow and steady recovery throughout 2020, especially when combined with interest rate cuts, tax cuts and the Federal Deposit Guarantee Scheme,” she said.
“Western Australia obviously went through a deep and protracted slump following the mining and resources boom but we are now in a situation where home building activity is undershooting demographic demand so the recovery is long overdue.”