Housing starts in Western Australia are forecast to be weaker for a third straight year in fiscal 2009, with numbers to drop by 16 per cent, the Housing Industry Association WA Outlook says.
HIA executive director John Dastlik said that big reductions in interest rates and the large fiscal stimulus through increases to the First Home Buyers Grant will underpin the housing market and deliver a recovery over the next financial year, but 2008/09 will prove to be another very soft year.
"Housing starts will be significantly weaker for a third straight year in WA in 2008/09, reflecting the lagged impact of higher interest rates last year running head on into the global credit crisis, a waning boost from the resources sector, and lower household and business confidence," Mr Dastlik said.
The number of housing starts is forecast to drop by 16 per cent in 2008/09 to a level of 18,800, largely due to a very weak second half of 2008.
"We do expect to see a moderate recovery in new home building over 2009/10 and 2010/11 and this will be very important in bolstering overall activity in the WA economy," Mr Dastlik said.
Housing starts are forecast to grow by 5 per cent in 2009/10 and by 7 per cent in 2010/11, reaching a level of 21,123.
"Lower interest rates and increased government spending needs to boost confidence and we need the WA State Government and Local Governments to do more in removing the many barriers faced by residential construction," Mr Dastlik said.
"Without reform of red tape and taxation, there is a real possibility that the industry will not see any pick up in activity before 2010."
For the renovations sector, total investment is forecast to drop by 9 per cent in 2008/09 to a value of $3.69 billion.
"Renovations activity is forecast to grow by 9 per cent over 2009/10 and 2010/11, taking the total value past the $4 billion mark for only the second time in history," Mr Dastlik said.
