New housing starts to flat-line in 2012

New housing starts in Western Australia are forecast to grow 24 per cent this financial year but then flat-line in 2011-12, a new outlook report shows.

The Housing Industry Association's latest state outlook reports that while there is a recovery in new home building underway in WA, the amount of homes needed will fall well short of what is required to house the state's growing population.

HIA WA regional executive director John Dastlik said the challenge lay with ensuring a strong, sustainable recovery beyond this year.

"HIA is forecasting growth of 24 per cent in new housing starts in financial year 2009/10 to a level of nearly 22,700," Mr Dastlik said.

"That result is testament to the success of stimulatory monetary and fiscal policies in 2009 and higher confidence attributable to a rebounding resources sector."

"Through 2009/10, the growth in starts will occur in detached housing which is forecast to grow by 31 per cent, to 19,300 dwellings.

"The 'Other dwellings' sector, which covers all non-detached housing, is forecast to contract by 8 per cent to 3,410 dwellings."

In 2010-11, HIA is forecasting new housing starts to grow by 3 per cent, with zero per cent growth in detached houses and 21 per cent growth in the other category.

Looking at 2011-12, HIA projects that there will be zero per cent growth in new housing starts with detached housing to contract by 2 per cent while non-detached houses will grow by 9 per cent.

"To ensure a sustainable new home building recovery we need to see further policy success in the form of reducing the myriad of supply side obstacles that needlessly constrain new home building," Mr Dastlik said.

"Failure to achieve this at the same time as the stimulus effects from low interest rates, first time buyers, and social housing provision are receding, will only add unnecessary upward pressure to existing home values and rents. That would translate to higher interest rates than would otherwise be the case."

"A key challenge for policy makers is to ensure we make serious inroads into Australia's shortage of shelter. That requires rapid progress in removing the obstacles to boosting the WA's housing supply including in the areas of affordable land supply, skills shortages, and greater access to finance."