The year ahead will be another healthy one for the housing and renovation industry in Western Australia, according to the December 2005 quarter HIA Western Australia State Outlook.
The year ahead will be another healthy one for the housing and renovation industry in Western Australia, according to the December 2005 quarter HIA Western Australia State Outlook.
The publication says Western Australia's pleasing forecast has not been repeated in other states where housing activity is cooling.
HIA's executive director in Western Australia John Dastlik said the on-going resources boom was feeding through into continued strength in housing.
"The housing industry in WA is still in a very healthy position as the state benefits from the strong resources boom currently underway," Mr Dastlik said.
"The current strength of economic conditions in the west is set to persist for some time yet. That will see continued strength in expenditure on housing throughout 2005/06 and into 2006/07," he added.
"Housing starts have surged by 56 per cent in the last four years and would have gone higher except for constraints faced on trade availability. With housing prices have appreciated, on average, by 70 per cent in the last three years, spending on renovations has also grown quite strongly.
"The factors in play such as strong population gains, a strong labour market, and healthy household income and wealth gains from the resources and house price booms will ensure a vibrant housing industry for some time yet."
Housing starts are unlikely to grow much further, primarily due to labour constraints. After increasing by 2 per cent in 2004/05 the HIA is forecasting starts to inch up by less than 1 per cent in 2005/06 to see a peak reached of around 22,960. Thereafter starts are forecast to ease by 5 per cent in 2006/07.
"With economic conditions remaining healthy and a high underlying demand for housing, 2006/07 is forecast to see only a moderate decline of 5 per cent in housing starts, to a level around 21,810," Mr Dastlik said.
In an environment of on-going house price gains, the renovations market is forecast to have a little further to run.
"Renovations expenditure is forecast to grow by a further 2 per cent in 2005/06, to a new all time record of over $2.4 billion worth of spending. There will likely be some moderation in spending after that, with renovation expenditure forecast to ease by 6 per cent over 2006/07 - 2007/08 to a still very healthy level of nearly $2.3 billion," Mr Dastlik said.
