Slow recovery tipped for new houses

The Housing Industry Forecasting Group is predicting a slow recovery for the Perth new homes sector, with dwelling starts down 11 per cent this year on last.

The HIFG predicted 18,500 dwelling starts in financial year 2012, down from 20,753 in FY2011.

HIFG chair Stewart Darby said weakness in consumer sentiment resulted in the group revising its October forecast of between 21,000 and 22,000 starts this year, and down to 20,500 for FY2013.

“Despite rising household incomes, lower interest rates, and the continues strength of the Western Australian economy, consumer sentiment remains low with a continued desire to pay down debt and not take on new loan commitments,” Mr Darby said.

On the supply side, Mr Darby said there was adequate land in the market to meet new housing market requirements into at least 2012/13.

“In Perth’s established house market, the lower quartile and median prices have stabilised at around $375,000 and $465,000, respectively, in the December 2011 and March 2012 quarters, which are similar to levels in late 2007,” Mr Darby said.