New home building set to fall again in 2019

Stock image.
Stock image.

NEW home construction is forecast to fall again in 2019, with improved conditions not expected until Christmas, according to the Housing Industry Association (HIA).

Executive director WA Cath Hart said previous chances of a 2019 recovery were killed off by the credit squeeze.

“WA’s economic activity has returned to growth, our population growth is increasing and mining employment is returning but unfortunately we’re yet to see that flow through to new home building at this stage,” she said.

“Significant weakness in building approvals at the end of 2018 caused by the national credit squeeze impacted the local market at a time when there was a very low volume of work in the pipeline.

“As a result, we expect that 2019 housing starts will remain uncharacteristically low and we hope to see improving conditions towards Christmas and into 2020.

In its quarterly Outlook report the HIA expects the level of home building in WA to be slightly lower in 2019 with total housing starts forecast to slightly decline by 1.1 per cent to reach 16,025 homes.

WA’s home building industry commenced construction on 16,200 homes in 2018, consisting of 12,730 detached houses and 3470 multi-units.

This was a 17.8 per cent decrease from 2017.

“Although we will be coming from a very low base, looking ahead we are forecasting housing starts in WA to rise by 18.1 per cent in 2020 to reach 18,918 homes that year,” Ms Hart said.

“This turnaround will follow the current renewal in growth in mining investment and mining employment in the WA economy.

“Gross state product has finally returned to growth after a protracted period of contraction and we believe the extensive recalibration of the mortgage market caused by the credit squeeze will have run its course by the end of 2019.”