The Housing Industry Association has suggested there are tentative signs that a recovery in Western Australia's new home building sector was already underway despite new residential work in the state falling slightly in the June quarter.
The Housing Industry Association has suggested there are tentative signs that a recovery in Western Australia's new home building sector was already underway despite new residential work in the state falling slightly in the June quarter.
According to the latest figures from the Australian Bureau of Statistics, new residential work done in the June 2009 quarter fell by 0.2 per cent in Western Australia.
This is significantly better than the seasonally adjusted new residential work done in Queensland where activity dropped dramatically, falling by 13.6 per cent.
HIA chief economist, Dr Harley Dale said there were tentative signs that a strong new home building recovery is certainly underway in WA.
"Leading indicators like the amount of lending going on to construct homes, building approvals going through the system and the amount of land sales all point to better times ahead for the new home building sector in Western Australia," Dr Dale told WA Business News.
"The specific thing for Western Australia to focus on is...to avoid running the risk of land shortages and skilled labor problems as the recovery gathers momentum.
"But you want that recovery to gather momentum because if you don't see that happen then that really bad affordability situation that Western Australia had, where it became the most unaffordable area in the country, you will quickly find the state in that situation again if you're not building sufficiently to keep up with the population growth."
New residential work done fell by 1.8 per cent in South Australia and 0.4 per cent in New South Wales but increased by 5.5 per cent in Victoria and was up by 5.6 per cent in Tasmania, 27.8 per cent in the Australian Capital Territory, and 48.6 per cent in the Northern Territory.
In an HIA statement, Dr Dale said, from a national perspective, while 2009/10 would be a healthier year for new residential construction, there was no strong recovery in prospect to make serious in-roads in to the shortage of new dwelling stock
"We are on the cusp of a moderate recovery in new home starts and that should feed through to a positive year for new dwelling investment in 2009/10," he said.
"However, the sixth consecutive decline in the worth of dwelling commencements in the June 2009 quarter highlights that dwelling investment isn't turning the corner yet.
"Even before adding rising interest rates to the mix, there are a number of factors likely to constrain the increase in new housing supply over the next 18 months, including projects bogged down in the approvals process, lack of available finance, and the very real threat that we will see residential land shortages re-emerge and skilled labour shortages across the construction sector intensify."
Full announcement below:
Slow Road for Housing Recovery
The Housing Industry Association, Australia's largest building industry organisation, said that final figures released today by the Australian Bureau of Statistics confirm that new residential building work fell in the June 2009 quarter, as did work commenced.
HIA Chief Economist, Dr Harley Dale said that while 2009/10 would be a healthier year for new residential construction, there was no strong recovery in prospect to make serious in-roads in to the shortage of new dwelling stock.
"We are on the cusp of a moderate recovery in new home starts and that should feed through to a positive year for new dwelling investment in 2009/10. However, the sixth consecutive decline in the worth of dwelling commencements in the June 2009 quarter highlights that dwelling investment isn't turning the corner yet," Harley Dale said.
Seasonally adjusted work done on new residential dwellings fell by 1.2 per cent in the June 2009 quarter to an annualised worth of $33.2 billion, 6.5 per cent down on a year earlier. Work done on detached houses fell by 1.8 per cent over the June quarter to be worth $22.3 billion in annualised terms. Work done on „other residential building was essentially flat at an annualised $10.9 billion. Seasonally adjusted new residential work commenced in the June 2009 quarter fell by 7.4 per cent to an anualised $32.3 billion.
"Even before adding rising interest rates to the mix, there are a number of factors likely to constrain the increase in new housing supply over the next 18 months, including projects bogged down in the approvals process, lack of available finance, and the very real threat that we will see residential land shortages re-emerge and skilled labour shortages across the construction sector intensify," said Harley Dale.
"These factors suggest that the recent gains in affordability will reverse and that the considerable pressure lower income rental households face from tight rental market conditions will remain with us for some time to come," Harley Dale.
The weakness in seasonally adjusted new residential work done in the June 2009 quarter was primarily reflected in Queensland where activity fell by 13.6 per cent. New residential work done fell by 1.8 per cent in South Australia, 0.4 per cent in New South Wales, and 0.2 per cent in Western Australia.
New residential work done increased by 5.5 per cent in Victoria and was up by 5.6 per cent in Tasmania, 27.8 per cent in the Australian Capital Territory, and 48.6 per cent in the Northern Territory.