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A solid upswing in WA’s housing development is expected this year, mainly driven by the proposed goods and services tax, according to the Challenge Bank’s Market Insights report.

As occurred in most states, dwelling approvals tumbled in the state in the third quarter last year, but bounced back solidly in the fourth quarter with approvals rising more than three per cent.

The bank said 1998 was a “very good” year for housing in WA with approvals increasing by nearly 16 per cent on the back of strong growth in both houses and units, the latter in particular.

On the finance front, both the number and value of new loans approved have bounced back from the mid-1998 slump.

Overall, housing finance grew strongly in 1998 with the number of new loans climbing 9.8 per cent and the value of loans rising by 15.6 per cent.

At the end of 1998 the average size of a home loan in WA was nearly 13 per cent higher than at the end of 1997.

“Looking forward, with affordability continuing to rise and confidence high, the preconditions are there for further upward momentum in activity,” the bank report said.

“Add to that the impact of the GST which can be expected to pull forward demand ahead of July 2000, and we are anticipating a further solid upswing in housing activity. The caution is that the peak in mid-2000 will be followed by quite a sharp fall before activity stabilises in early 2001.”

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