WA Housing Demand Optimistic For 2016 

Property Council CoreLogic RP Data’s Australian Residential Development Outlook Spring Edition.

The report forecasts ongoing national activity as the industry comes off the back of building an unprecedented supply of new dwellings.

“The expectations for low interest rates, reasonable ongoing foreign investment and an ongoing housing shortage will continue to drive a fundamental demand for new homes to be built through 2016,” Property Council WA Executive Director Joe Lenzo said.

“In a vital sign for improving affordability, the indicators also show that residential supply in Western Australia is meeting household formation requirements to create enough housing to satisfy what has until recent times been significant growing demand. However, one good year doesn’t undo 10 years of underbuilding,” said Mr Lenzo.

CoreLogic RP Data Head of Research Tim Lawless says “Investor loans nationally are winding back, as banks reduce their appetite for lending to this market. This will see new housing commencements, particularly in apartments start to recede.

Housing prices across capital cities have risen by 57 to 138% in the five year period to 2005, and once they did that they went on to post 23 to 84% gains in the next five year period. However, the days of a 15-30% improvement in national house prices per year have past.

“With Property contributing significantly to state taxes, the economy will rely on strong housing construction and so it is important that the right policy settings are introduced around planning for infrastructure and tax reform to maximise the ongoing positive impact of this industry on the country’s economic wellbeing.

“We now have a federal focus from both sides of Government on liveable cities and the built environment, which supports the prospect that residential activity levels will be coordinated nationally to tackle affordability, support jobs and drive the WA economy,” Lenzo concluded.