West Australian Housing Outlook
Forecasting Dwelling Commencements in Western Australia
Dwelling commencements in WA 2017-18 to 2020-21
2017-18 (Actual) 18,124 (19,500 was forecast)
2018-19 18,000
2019-20 19,000
2020-21 20-22,000
HIFG’s Forecast April 2019
Dwelling commencements in WA fell by 9% in 2017/18 to 18,124.
Some industry bodies predicted an 11% increase to 21,000.
However stabilization of the new build market did not eventuate for many reasons.
2018-19 commencements will also be at risk of missing forecasts with the recently added 7% forgin investment surcharge, from the current sate government. You also have to consider the Banking Royal Commission and how that has had an effect to housing lending since late 2018.
To finish things off we have to consider the impact of the federal election to finish the financial year.
Unless some of the critical indicators change, New Home Building Brokers expects conditions to remain flat over the coming years, with a slow recovery in 2019-20 and into the following year 2020-21.
Critical points to recovery of the market.
- Removal of the 7% foreign invest surcharge
- Population growth needs to increase to 2013 levels min
- Rental market vacancy rates. Stock becoming tighter
- Consumer confidence
- Interest rates staying steady
- Lending restrictions from APRA reduced make money available
- Valuations of the current housing coming back
- And many more
WA Dwelling commencements have had the biggest fall since 1985. WA is currently running at 18 consecutive quarters, and this looks to tracks towards 21 before turning. These figures alone show why the building industry has had a very hard time over the past 4-5 years. The positive news for Western Australian is the medium house price is showing its first signs of the bottom of the market.
NAB Hedonic house price forecast and also residential property price index by state also shows WA moving from a -13 index to a positive 56 in the next 2 years, should this occur it would be the biggest growth in the country.
About the Author
Tristan Kirkham | Managing Director
Tristan has managed some of Australia’s major building companies, both project and private. His committment to customer service and providing market leading communication product for the home building industry has led to a role as regular Judge in the HIA Green Smart, HIA Kitchen & Bathroom Awards and the major Housing Awards. Winning multiple awards throughout his career in the housing industry, he is dedicated to improving the industry standards and practices. Tristan's vision is to provide a better way to build homes for all parties.