The Housing Industry Association has significantly downgraded its forecast for new house builds in Western Australia for 2019, tipping a decrease of 0.9 per cent, compared to its previous estimate in May of an 11.8 per cent rise.
The Housing Industry Association has significantly downgraded its forecast for new house builds in Western Australia for 2019, tipping a decrease of 0.9 per cent, compared to its previous estimate in May of an 11.8 per cent rise.
The decrease would take house starts to 12,261, down from its prior forecast of 14,592.
Multi-unit starts are forecast to decline by 1.9 per cent for the year, rather than rise by 25.2 per cent as per its previous estimate.
The fall would leave multi-unit starts at 3,404, compared to 4,981.
In total, this represents a 1.1 per cent decrease on 2018, to sit at 16,025 dwelling starts.
WA’s home building industry commenced construction on 16,200 homes in 2018, which was a 17.8 per cent decrease from 2017.
The announcement comes after the Housing Industry Forecasting Group in November predicted 18,000 new home builds in WA would occur this financial year.
HIA WA executive director Cath Hart said the credit squeeze combined with soft market activity would keep housing starts low in the state this year.
“Western Australia’s economic activity has returned to growth, our population growth is increasing and mining employment is returning but unfortunately we’re yet to see that flow through to new home building at this stage,” Ms Hart said.
“Significant weakness in building approvals at the end of 2018 caused by the national credit squeeze impacted the local market at a time when there was a very low volume of work in the pipeline.
HIA forecasts a turnaround to finally occur in 2020.
“Although we will be coming from a very low base, looking ahead we are forecasting housing starts in
Western Australia to rise by 18.1 per cent in 2020 to reach 18,918 homes that year,” Ms Hart said.
“This turnaround will follow the current renewal in growth in mining investment and mining employment in the WA economy.
“Gross state product has finally returned to growth after a protracted period of contraction and we believe the extensive recalibration of the mortgage market caused by the credit squeeze will have run its course by the end of 2019.”
The Master Builder's Association have forecast 16,796 new residential builds for the upcoming financial year.
Master Builders Association of WA executive director John Gelavis said urgent action needs to be taken to get the state's residential construction through one of its most difficult periods in recent memory.
"We've been calling for an increase to the first homebuyers grant from $10,000 to $15,000, an increase to the Keystart income limits, and an increase to the stampduty threashold from $480,000 to $550,000 to allow new homebuyers into the market," Mr Gelavis said.
