WA’S building industry continues to struggle, with the latest Australian Bureau of Statistics (ABS) figures revealing a drop in dwelling approvals in the year to February 2019.
Master Builders housing director Jason Robertson said building approvals for units and apartments showed the most disturbing drop.
“The latest figures for February show a 10.9 per cent drop for total dwelling approvals compared to the previous month,” he said.
“The figures for units and apartment building approvals show an alarming 28.4 per cent reduction compared to the previous month and for detached dwellings it shows a 2.6 per cent reduction on the prior month and a 9.9 per cent reduction compared to 12 months ago.”
While the ABS figures gave a trend estimate of a 2 per cent increase in total dwelling approvals from January to February for WA, Mr Robertson said month-to-month variations could be volatile and it was often more useful to look at the figures over a long timeframe to try and appreciate the bigger picture.
“On this score, the trend in building approvals is still very much a downward one, certainly for WA,” he said.
Mr Robertson said first-home buyers were a large percentage of the WA market but activity had fallen, with the number of loans to first-home buyers down 9.8 per cent in the year to January 2019 when compared to the year to January 2018.
He said the building market was being affected by a range of factors, including population growth.
“The fact that record inward migration over the past decade was accompanied by new home building reaching an all-time high is a recent demonstration of this pattern,” he said.
“But for WA, growth is sitting at 0.9 per cent, historically very low and well below national average at 1.6 per cent.”
Mr Robertson said interest rates, household incomes and house prices were the biggest factors that determined the number of new homes built each year.
“For WA this is all about jobs/wages growth; unemployment is currently at 5.9 per cent (down from 6.1 per cent),” he said.
“There are also still impacts being felt from the Royal Commission(lending criteria and also valuations) with high existing stock – currently there are 17,251 properties listed for sale compared to 16,704 at the same period last year – and high fall over lending rates being experienced, in some areas around 40 per cent.”
The Master Builders is asking the State Government to support the struggling industry.
“With the State Budget being handed down in May, the State Government needs ensure stimulus for the industry is given, particularly incentives such as broader Keystart income criteria, a higher stamp duty threshold and increase to the First Home Owner grant,’ Mr Robertson said.
“It can’t be ignored; the figures speak for themselves.
“Master Builders knows the government is listening to the industry but now it is time to act decisively to support first-home buyers, the industry and jobs.”