THE winter edition of the Western Australia State Outlook – the Housing Industry Association’s quarterly report card on the WA residential sector – signals further deterioration for the new home building market in 2011.
“It is clear WA’s new home building levels in 2011 will be even more disappointing than we thought, and unfortunately WA is now running second only to Queensland as the weakest new home building market in Australia,” HIA’s WA executive director John Dastlik said.
“The new home building sector has been hit hard by interest rate increases, not to mention the persistent rhetoric suggesting the need for more hikes, the ongoing credit crunch and a range of ongoing supply side obstacles, the foremost being residential land supply.
“Conversations with WA HIA members confirm what is being observed in the leading indicators for new home building; that is, the trajectory towards weaker building levels in WA is set to continue.”
Mr Dastlik said the WA Government needed to consider stimulus measures to boost building levels in the State, as well as address the issue of inadequate land supply.
“We now expect the volume of housing starts in 2010-11 and 2011-12 to just scrape in above the GFC-induced downturn in starts in 2008-09,” he said.
“The post-GFC housing stimulus has gone and we are now looking at housing starts volumes returning to that same dangerously low level only two years on.
“In calendar year terms, after a healthy 24,550 starts in 2010, HIA forecasts that WA’s dwelling starts will fall by 24 per cent in 2011 to a level of 18,700 before an improvement of 8 per cent in 2012 to 20,160.”
Mr Dastlik said the outlook for renovations investment in WA was healthier than the outlook for housing starts.
“Total investment in renovations in WA is expected to grow by 4 per cent in 2010-11, off the back of a 16 per cent increase in 2009-10,” he said.
“This would take the value of renovations investment in WA to $4.9 billion in annual terms – the largest result on record.”