The Housing Industry Association says Western Australia's struggling residential construction sector is due to bottom out soon, and is forecasting a rebound of 17.8 per cent over 2012 and 2013 combined.
Despite the predicted growth, however, the HIA has forecast an annual dwelling shortfall of more than 7,000 this financial year, and with its prediction for 2011/12 to be weaker again for housing starts, the shortage is expected to blow out to around 8,000 dwellings by 2012.
The HIA's Western Australian State Outlook, released today, forecast dwelling starts in WA would hit 19,860 for FY2010/11 - a 21 per cent fall - drop back to 19,170 starts in FY2011/12, before rebounding to 21,670 in FY2012/13.
Housing starts in WA grew by 21 per cent over calendar 2010, but the HIA said all of those gains, and more, would be lost over 2011, slipping back 24 per cent to 18,700 starts.
The highest level of dwelling starts recorded by the HIA since 2003 is 25,930 in FY2005/06.
The Housing Industry Forecasting Group's April update reiterated its October prediction of 20,000 dwelling starts for WA in 2010/11, down from 25,000 in 2009/10.
For 2011/12, The HIFG adjusted its forecast slightly downwards, from 21,000 starts to 20,000.
"The expected sharp fall in WA housing starts (from a less than spectacular height) in 2010/11 is frightening stuff," the report said.
"Apart from these low levels of building causing alarm via a comparison to historical levels, once we consider also that WA needs to be building in excess of 25,000 homes a year to meet annual underlying demographic demand, real fear should set in."
The HIA said due to the continued shortfall of housing in WA, tight rental market conditions will persist.
Vacancy rate data from SQM Research showed a 1 per cent vacancy rate in Perth in April.
"As convention dictates that a rate of less than 3 per cent is representative of a tight rental market, there is no doubt that those looking for property to rent in Perth are doing it tough and unfortunately will continue to do so in coming years - without measures to stimulate the supply of new housing there will be no relief," the HIA said.
