01/07/2021 - 09:47

New housing starts to hit five-year high

01/07/2021 - 09:47

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The Housing Industry Forecasting Group has revised its predictions for 2020-21, increasing its forecast for Western Australian dwelling commencements.

The HIFG has forecast 23,000 dwelling commencements in WA for 2020-21. Photo: Gabriel Olivera

The Housing Industry Forecasting Group has revised its predictions for 2020-21, increasing its forecast for Western Australian dwelling commencements.  

The HIFG had previously forecast 18,000 new housing starts in November 2020 and has now increased its estimations to 23,0000 dwelling commencements.

If those predictions materialise, new housing starts in WA could reach its highest level since 2015-16.

Official data for housing starts from the Australian Bureau of Statistics for the full 2020-21 reporting period is scheduled for release later this year on October 13.

While the predicted 23,000 starts sit above the long-term average of more than 22,000, this would still be well below the peak of 2014-15 (31,705 dwelling commencements).

HIFG said it was anticipated that dwelling commencements would fall back to within the range of 17,000 to 21,000 for the two proceeding financial years.

The stimulus packages have continued to underpin activity in the new build market, which is expected to fuel commencements through to 2021-22.

That’s backed by new home sales data, which were 82.5 per cent higher in WA throughout the year to March 2021.

The surge in activity across the building and construction markets has created skills and materials shortages, with a Housing Industry Association survey conducted in March revealing these two factors as the greatest pressure points for businesses in 2020-21 in WA.

These remain the main pressures heading into the next 12 months, the HIFG said, with bricklayers and carpenters the highest-demand trades in WA.

HIFG chair Cath Hart said recently announced changes to the construction start times for the state government’s Building Bonus and the federal government’s HomeBuilder schemes would also help relieve pressure from labour shortages and intermittent supply chain challenges.

“The Housing Industry Forecasting Group noted that low levels of housing stock will be a key challenge in WA throughout 2021, driven by a tight rental market and longer than-usual completion times for new dwellings,” Ms Hart said.

“WA’s extraordinarily low rental vacancy rate signals strong consumer demand and a lack of supply as people have moved to Western Australia or returned here from interstate and overseas as a result of COVID-19.

“However, despite the low rental vacancy rate and record-low interest rates, investors have not yet come back into the market to provide additional stock as might ordinarily be expected.

 “Overall, WA has recovered faster than other parts of Australia and we expect that to continue throughout 2021.”

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