A recent report by the real estate industry forecasting agency, which is represented by real estate industry representatives and government agencies, shows that the number of new properties in Western Australia has declined significantly in the 2017-2018 fiscal year.
Real estate agencies said that the construction of multi-unit residential buildings is the “key to recovery” in the Western Australian real estate market.
The report shows that the number of houses built in the last fiscal year was 18,124, down 9% from last year and fell to a record low, well below the forecast of 19,500. Forecasting institutions attributed this decline to the fact that the market stability of new homes failed to reach the expected level, and there will still be no major fluctuations in the short term, which will continue to develop steadily.
The agency expects to have 18,000 new properties this fiscal year, which will gradually increase to 19,000 the following year and to 22,000 by 2020 – 2021. They also expect that overseas buyer surcharges, which will take effect on January 1, 2019, will affect investment in multi-unit residential buildings. However, the report believes that the construction of multi-unit residential buildings is still the key to market recovery. Although the agency does not expect much change in the number of such properties in the short term, as the value of land increases and the economic model of multi-unit residential buildings becomes more and more popular, market demand will become larger. The number of starts is expected to increase.
In response, Steven Rowley, head of HIFG, said that despite the low interest rates on home loans, falling house prices and stable rents, the housing affordability of low-income families in Western Australia remains a serious problem.
Rowley tells us that this is the most persistent housing downturn in the last 30 years. The population growth rate is lower than expected, and the continued oversupply of housing in the existing market has led to weak demand for new properties. At the same time, Rowley said the demand in the housing market will not improve until the population has shown significant growth.
However, the Western Australian housing market is not without hope. Rowley said: “The rental market is showing signs of tightening, and the rental vacancy rate is the lowest in four years. If this trend continues, rents will increase, which may prompt renters to buy new properties.
At the same time, Western Australia is still the first state to occupy a relatively large number of homes. The first home purchase accounts for nearly a quarter of the property market, which is much higher than the Australian average. Rowley said Keystart’s home purchase financing, low interest rates on loans and a good buyer market provide a good opportunity for home buyers in Western Australia.
In the last fiscal year, the number of houses under construction in Western Australia fell to a record low.
Western Australian Housing Minister Peter Tinley said the state’s Metronet public transport program will promote the construction of multi-unit residential buildings to some extent and improve the diversity of Perth housing.
“The McGowan government is addressing these issues with thoughtful and meticulous principles to provide housing to buyers in the right place at the right place,” Tinley said.
“The Western Australian Government’s Metronet program vision is to promote Perth’s investment, economic growth and community revitalization while promoting appropriate housing and transport-oriented development.”