Strong year for housing starts

The Housing Industry Association Housing 100 survey shows that 23,180 homes were commenced over the 2004-05 period, and that while revenues among the state’s largest 20 builders edged up marginally, their market share fell from 71 per cent to 69 per cent.

However, the number of starts by the top 20 was up 1.5 per cent from the previous year to 15,973 dwellings.

Showing the strength of the residential building sector in Western Australia, the two largest residential homes builders – BGC and the Alcock/Brown Neaves Group – are also the two largest residential builders nationally.

BGC had 4,535 starts, 602 less than the 5,137 starts achieved in 2003-04, and the Alcock/Brown Neaves Group had 3,402 starts, 94 less than the previous year.

While the state’s top two builders were down on starts from last year, most other builders recorded an increase.

HIA Western Australia executive director John Dastlik said the rise in starts over the year was a remarkable effort, particularly given the softening in demand that emerged in most parts of Australia.

“Western Australia’s larger builders have again shown that even in tougher times, the right mix of sales and marketing and the ability to provide a high quality, well-targeted product can still lead to results,” Mr Dastlik said.

He said the drop in market share by larger builders had been taken up by smaller operators, which was an indication of the strength of the housing market.

“It is, however, important to note the importance of sensible urban planning and keeping a lid on the regulatory costs that are imposed on land development and home construction,” Mr Dastlik said.

“This year’s National Housing 100 has again shown that in those regions and states where housing is more affordable, businesses within the land development, home building, and material manufacturing industries are creating jobs and contributing strongly to economic growth.

“For 2005-06, it is important to keep downward pressure on the price of undeveloped land and rein in the spiralling level of fees, taxes and charges on development.”

The HIA is forecasting a continuing strong market, despite slight drop-offs this year and next year.