New multi-residential construction ‘key to recovery’ for WA market

New multi-residential construction ‘key to recovery’ for WA market

New multi-residential developments will play a vital role in the recovery of Western Australia’s property market, a leading housing industry group has predicted.

It comes as a new report by the Housing Industry Forecasting Group, a collaboration of housing sector representatives and government departments, reveals a significant downswing in the number of new dwellings built in WA in the 2017-2018 financial year.

The report shows the number of homes under construction fell to a record low last financial year – dropping by 9% to 18,124 – well below the 19,500 forecast by the group.

The group attributed the decline to the new build market’s expected stabilisation not eventuating and expected the sector to remain flat in the short term.

It is forecast there will be 18,000 new builds this financial year, with a gradual increase to 19,000 the following year and up to 22,000 in 2020-2021.

“Multi-residential dwelling construction remains a key to the recovery,” the report says.

“While the group does not expect much change in the level of multi-residential commencements over the short term, it expects that any increase in dwelling commencements to be underpinned by demand for multi-residential dwellings as land values increase and the economics of multi-residential construction become more favourable.”

HIFG Chair Steven Rowley says housing affordability continues to be a significant issue for WA households on low incomes despite the enticements of low interest rates, falling house prices and steady rents.

“This is the most sustained downturn in 30 years,” Dr Rowley says.

HIFG Chair Steven Rowley says housing affordability continues to be a significant issue for WA households on low incomes despite the enticements of low interest rates, falling house prices and steady rents.

“This is the most sustained downturn in 30 years,” Dr Rowley says.

The group also expects the foreign buyer surcharge, due to come into effect on January 1, 2019, to impact investment in multi-residential developments.

WA Housing Minister Peter Tinley says the State Government’s Metronet public transport plan would go some of the way to fuelling multi-residential dwelling construction and improving diversity in Perth’s housing stock.

“The McGowan Government is addressing these issues by using the principle of thoughtful density to deliver infill housing in the right forms and in the right locations,” Tinley says.

“The State’s Metronet vision will play an important role in promoting appropriate infill and transport-orientated developments as well as driving investment, economic growth and community regeneration across Perth.”

2019-01-30T07:27:11+00:00