The home-building industry says there is a growing gap between economic activity and housing construction in Western Australia, with the number of new homes sold in April plunging by more than 10 per cent after a healthy March.
The home-building industry says there is a growing gap between economic activity and housing construction in Western Australia, with the number of new homes sold in April plunging by more than 10 per cent after a healthy March.
The latest Housing Industry Association-JELD-WEN New Home Sales report for April indicated a sharp decline of 10.3 per cent for WA, in contrast to a flat national performance of a rise of 0.2 per cent.
The figures showed the outlook was not much prettier for the state, with building approvals for detached houses in the March 2011 quarter down 33 per cent on the previous year.
HIA chief economist Harley Dale said the figures were more evidence of the growing rift between economic activity and new housing activity in WA.
Mr Dale said it had been well reported that WA was the nation's fastest growing economy, and that any reasonable economic outlook would forecast that to continue for the time being.
"Despite those underlying relatively healthy economic conditions and aggregate, we have a real housing affordability problem in Western Australia," Mr Dale told WA Business News.
"We don't have affordable land, we don't have reform of the planning systems and the like happening at the pace that we would ultimately desire, and you're sort of getting this movement in opposite directions.
"Housing is not being taken along for the economic ride because there are not enough people who can afford to buy-in."
Mr Dale said the healthy March figures, when the number of new homes sold increased by 4.3 per cent, were bolstered by a better-than-average final fortnight of sales and not sustainable.
"Unfortunately no one is taken by surprise when we talk about an overall inherent weakness in new home building in Western Australia," he said.
"I think as much as anything the 10 per cent fall reflects the fact that the environment is just not there to be able to sustain two healthy months in a row."
Mr Dale said the problems with new home sales in WA were symptomatic of a planning reform process which he believed had stalled.
"Western Australia's experience is probably testament to the fact that we need to reinvigorate that reform process," he said.
"On the new home building front we simply have got to keep focused on the need to reform the system and make it better.
"We've got to get the whole cost of new housing and the cost of land release under control, so that we at least level it out rather than continue the increases year-in-year-out of the cost of serviceable land or the cost of housing.
"At a national level, I think we need to reduce the amount of taxation that's levied on new housing; it's a very, very heavily taxed sector of the Australian economy."
