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{{propApi.successMessage}} {{region}} Change locationHome building will keep growing in WA, despite the rise in taxation
Home building will keep growing in WA, despite the rise in taxation
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HIA recently released its Economic and Industry Outlook report. The report includes updated forecasts for new home building and renovations activity nationally and for each of the eight jurisdictions.
“Western Australia enters this cyclical downturn in home values with one of the stronger economic and housing market positions nationally,” added Mr McGowan.
“Population growth remains elevated and employment conditions robust and with time, they will outweigh the loss of confidence that has emerged since the Budget.
“These structural factors, combined with an acute shortage of housing stock, will ensure that the current decline in established home prices is short and shallow.
“We anticipate that home prices will rise before the end of the year, this will see demand for new homes return quickly in the new year, without disrupting the supply of new homes in Western Australia.
“Outside of Perth the pent-up demand for homes remains acute and the volume of home building will continue to increase.
“The strong employment conditions in Western Australia are both a source of demand for housing and a source of price increases to the cost of home building.
“Home building remains constrained partly due to access to labour.
“The slow processing of visa applications for overseas skilled labour remains a capacity constraint of the volume of new homes that can commence construction.
“If the cost of constructing new homes continues to rise faster than the price of established homes, demand for new homes will slow.
“The need to reduce the cost of serviced land is another key element necessary to increasing the supply of homes in Western Australia.
“Renovations activity in Western Australia also remains at a very high level. The rise in established home prices over the past five years have, and will continue, to support a strong preference for owner occupiers to renovate their principal place of residence.
“Western Australia is not waiting for a return to rising home prices to see the volume of building work grow.
“There is a significant buffer of home building still in the pipeline and ongoing employment growth that will ensure that Western Australia is protected from the cyclical shock to established home prices.
“The result is likely to be an extended period of elevated home building rather than another rapid increase in commencements,” concluded Mr McGowan.
To purchase our HIA State and National Outlooks
HIA Forecasts - WA
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