Economic and industry forecaster BIS Shrapnel has released its annual report on building in Australia, with the outlook for Western Australia showing a strong increase in commercial building and a steadying for residential building.
Economic and industry forecaster BIS Shrapnel has released its annual report on building in Australia, with the outlook for Western Australia showing a strong increase in commercial building and a steadying for residential building.
Economic and industry forecaster BIS Shrapnel has released its annual report on building in Australia, with the outlook for Western Australia showing a strong increase in commercial building and a steadying for residential building.
WA’s aggregate growth in total value of building commencements for 2004-5 is 9 per cent.
According to BIS Shrapnel senior project manager Jason Anderson, dwelling starts in WA were close to steady in 2004-05, with investor demand remaining strong due to solid growth in residential property prices, leading to a boom in apartment construction.
“Our analysis indicated that Western Australia’s housing supply is currently matching underlying demand, and housing starts are forecast to be steady in 2005-06,” Mr Anderson said.
“In addition, non-residential building commencements are forecast to rise in 2005-06, so that overall building activity is expected to show further growth.”
The report says growth in residential property prices in WA, South Australia, Tasmania and the ACT were expected to ease over 2005-06.
At the same time, those areas should experience strong growth in building prices as capacity restraints are tested by rising building and construction activity.
These processes are expected to lead to weakening dwelling construction, and add a further leg to the downturn in national housing starts.
However, a rise in non-residential building activity over the 2005-06 period is expected to offset any decline in residential building.
“An increasing number of commercial and industrial projects will underpin a national forecast 17 per cent rise in non-residential building commencements to just under $18 billion, which would be the highest value since 1988-89,” the report says.
“Enduring strength in building activity will contribute to further growth in total employment during 2005-06. A tightening labour market is expected to generate a pick-up in wages growth and inflation, and lead the Reserve Bank of Australia to raise interest rates further over the course of 2006."