The strength of housing demand in Western Australia has taken the industry by surprise, with a 34 per cent year-on-year increase in dwelling commencements in the State. Western Australia’s Planning Minister John Day launched the Housing Industry Forecasting Group’s outlook for the dwelling construction industry in the west, forecasting a strong housing sector in 2013/14.
Following the highest population growth in 30 years, dwelling demand in Western Australia has outstripped the previous industry forecasts and pushed the housing industry to its production capacity. WA’s population increased by 3.5 per cent or 83,870 people in 2012/13 and just over 24,000 dwellings were commenced to meet demand. Looking forward in 2013/14, although the annual population growth is expected to ease to 2.2 per cent, the Group’s forecast for 2013/14 is for another 24,000 dwelling commencements.
The Group noted that while at present there is no overall lot shortage in Perth, that to meet dwelling demand, Perth requires 18,000 residential lots per annum and the “HIFG remains concerned about the capacity of the sector to supply sufficient serviced, titled lots to meet future demand in a timely manner.”
As part of its assessment, the Group also does its own forecast of underlying dwelling demand based on demographic factors in Western Australia. This latest report indicates as at June 2013 there was an overall shortfall of 32,500 dwellings in Perth and a small surplus of 5,500 dwellings in the rest of the State. Based on the current forecasts, Perth’s dwelling shortfall is projected to gradually worsen to 47,000 dwellings by June 2017.
Key implications for MacroPlan clients are that the development industry has a great opportunity to take advantage of the forecast strength in dwelling demand, at the same time that the future supply is constrained.
The Group is made up of industry organisations (REIWA, HIA, MBA, UDIA, CCIWA, CMEWA, BankWest, HURIWA) and key WA State Government bodies (Treasury, Planning, Housing, Water Corporation, Premier and Cabinet).
Contact Stuart McKnight, General Manager for Western Australia today to discuss your WA property research requirements.