Dwelling Commencements (WA)

The forecast for dwelling commencements in Western Australia is grim. 

In the latest Housing Industry Forecasting Group report which forecasts dwelling commencements in Western Australia for the period 2018 to 2021, dwelling commencements are at the lowest level since 1984 and it is expected that it will remain static over the coming year. 

The main reasons for this low level of dwelling commencements are the following:

  • Slow population growth in WA.
  • Labour market is strong, however wages still remain weak.
  • Housing finance remains weak.
  • Strengthening of the private rental market.

The strengthening of the private rental market can also be evidenced by the decline of the vacancy rate which dropped from 7% to 4.7%.

The housing market is struggling, however there are indicators that the economy is getting better and the market will recover - this is where problems might arise.

Once the economy has recovered and the population starts to grow again, rents will go up and the existing housing stock will not be enough to meet demand, which will also lead to a shortage in affordable housing.

However, there are positives in the current downturn of the housing sector, which poses opportunities for social and community housing.

The housing sector is cyclical, and measures should be taken now to ramp up the social and community housing stock, before the sector recovers and strengthens again, which will result in affordability issues and more people that will need to support through the provision of public housing.

If proactive measures are taken now, the WA housing sector will be better prepared to respond to future demands.

You can read the full report here.

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