Category: Building and Construction / Business, Economics and Finance / Work / Government and Politics
WA facing second year of declining new home builds
Wednesday, 23 Nov 2016 17:56:58

The construction sector employs 10 per cent of WA's workforce. (ABC News: Tom Wildie)
Western Australia's building industry is facing a second year of steep falls in the number of new homes being built, according to a new report from the Housing Industry Association (HIA).
Low population growth and the mining sector slowdown are cited as the major factors contributing to the drop.
HIA executive director John Gelavis believes the decline in migration into the state, which contributed to the record 31,000 homes built in 2014-15, is weighing on the sector.
"We had two to three years of particularly strong growth on the back of strong net overseas migration and strong net interstate migration," he said.
"What we are seeing currently is a decline in that net overseas migration."
The number of new homes built in WA fell 19 per cent in the 12 months to June and is expected to fall a further 22 per cent this financial year.
Despite the grim forecast, Mr Gelavis believes there are signs the industry will turn around.
"Certainly the inquiry levels we have seen in recent times coming through from a lot of our major members are suggesting there are good signs out there," he said.
Mr Gelavis said there were several incentives in place to encourage those thinking of moving house to consider building a new one.
"The first-homeowner grant of $10,000 is still available, plus stamp duty exemptions on land and new builds is another key element," he said.
"Record low interest rates certainly play a part and finance such as Keystart Home Loans play an important part too, so when you package all of that together there are still really good signs for anyone looking to enter the housing market."
Government urged to remove obstacles
Master Builders Association WA housing director Jason Robertson believes the retreat in the number of new homes being built is part of the cyclical nature of the industry.
But he urged the State Government to remove some of the obstacles encountered by consumers trying to build or renovate their homes.
"It comes down to a couple of key factors: the regulatory charges such as taxes and other accompanying fees and charges, and certainly the planning reform in this particular state which is a great inhibitor."
The construction sector employs 10 percent of the WA workforce, including 40 percent of apprentices, and with jobs likely to be a key issue at the state election in March, pressure is being applied to both the Government and the opposition to take note of the decline.
Treasure Mike Nahan acknowledged housing played a major role in the state's economy and said the Government had introduced policies to help stimulate the sector, such as abolishing the first-homeowner grant for established houses.
Yesterday, Reserve Bank assistant governor Christopher Kent warned Western Australians there was more pain ahead as the economy struggles to rebound from the economic downturn.
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