WA house starts tipped for slow recovery from late 2020
The Housing Industry Forecast Group predicts WA dwelling starts will remain flat at 15,500 in 2019-20, with a subdued recovery from 2020 to 2022. That prediction is in line with the HIFG’s forecasts, realised, that WA commencements would fall 14 per cent in 2018-19.
Property Council WA, with other industry, business and government groups, is a member of the Housing Industry Forecasting Group, established under the auspices of the Department of Planning, Lands and Heritage to provide independent commentary on the housing sector in Western Australia.
The main reasons for the subdued forecasts were slow population growth, about 1 per cent, a soft established housing market and sluggish prices particularly in outer suburbs.
As well, as WA building approvals and finance commitments continue to fall, the Housing Industry Forecasting Group formed the view that a potential pick up in new housing activity was still some months away.
On the upside, falls in Perth rental vacancy to 2.5 per cent had established a “balanced” market, which was starting to improve demand for rental dwellings.
The group noted that lower interest rates were having little impact on new or established housing markets though making an upward adjustment to the income limits for the State Government’s Keystart program, designed to help more West Australians into homeownership, had had a positive impact.
“Despite lower house prices and rents, housing affordability remains a problem for those on low and even moderate incomes, when it comes to ownership. Current low levels of construction activity combined with the tightening rental market could lead to supply and affordability problems in the future,” the report said.
The Housing Industry Forecasting Group also welcomed the State Government’s 75 per cent rebate on stamp duty for off-the-plan apartments, saying the stamp duty rebate may have a positive impact on dwelling commencements in the future.
The report, released on November 28, can be found here.