JANUARY 10 2018 - 6:21AMSAVEPRINTLICENSE ARTICLEWA's housing market 'close to bottoming out': HIA
Australia's peak housing body predicts Western Australia's housing market is close to "bottoming out" after the state's housing construction approval figures dropped for the seventh month in a row.
Australian Bureau of Statistics November housing approval figures, released on Tuesday, showed WA detached house approvals dropped by 3.3 per cent from October, while non-detached building approvals dropped by 0.6 per cent.
Housing Industry Association senior economist Shane Garrett said his association expected, however, WA's new build market to trend into the positive from 2018 on the back of an improving employment sector.
"The WA market is approaching a bottoming out point after record highs in 2014," he said.
"Since then it's fallen back quite considerably over the last three or four years, but the figures that we have seem to indicate it's reaching a bottoming out point and it may start growing again over the next couple of years.
"We predict a recovery in WA and we're probably looking at about 24,000 new dwellings to start in the year 2021, in three years time - that's the scale of recovery we expect will take place.
WA, in the 2016-17 financial year, recorded 20,346 dwelling approvals, down 38 per cent from the 32,707 approvals made in 2014-15 toward the end of the mining boom.
WA homeowners still have a strong preference for detached houses when compared to other Australian states, however, one third of new dwelling approvals in November were for duplexes, units, townhouses and apartments as builders look to infill Perth's inner suburbs.
The state has been on a downward trend for new home builds since May 2017, one month after the state government cut short its first homeowners grant $5000 boost, returning the incentive to $10,000 seven months earlier than expected due to the state's dwindling finances.
The move saved the state government an estimated $20 million.
Treasury in May estimated the reduction in the grant would deter around 550 people from purchasing their first home in the second half of 2017, while around 90 people would likely bring their purchase forward to beat the mid-2017 deadline.
Figures showed the number of people purchasing a new home under the scheme had reduced from 2,951 between January to April 2016, compared to 2,364 during the same period in 2017 - despite the additional $5,000 boost.
Australian Bureau of Statistics spokesman Daniel Rossi said WA's new home build figures appeared to be stabilising in 2016/17, but had begun a descent again in the past six months.
Shadow Treasurer Dean Nalder said the statistics showed housing construction approvals had plummeted under the McGowan government.
"The number of housing approvals in the first three months of the McGowan Government was 3571, that has fallen by 10 per cent, to 3216, in the three months to November," he said.
"This is a direct result of Mark McGowan Government cutting the $5000 First Home Owner Grant boost in April and more broadly sucking confidence out of the community with new taxes and massive cost of living increases
"Since that cut, the housing construction sector has been in free fall and responsibility starts and finishes with Premier Mark McGowan."
Treasurer Ben Wyatt said the government expected dwelling investment to start growing again in 2018-19 in line with a recovery in labour market conditions and income, and a lift in population growth.