- 23,000 dwelling commencets forecast for 2020-21 FY
- Higher than the 18,500 estimation in November 2020
- UDIA is set to make submissions for the state budget next week
While forecasts recently released by the WA Housing Industry Forecasting Group (HIFG) reflect housing starts at record highs, land supply remains a critical issue for Perth and the regions, according to the WA division of the Urban Development Institute of Australia (UDIA).
“The HIFG is forecasting record numbers of housing starts for the 2020-21 financial year and while they are expecting commencement levels to decline slightly in the following years, housing demand is likely to remain strong,” said UDIA WA CEO Tanya Steinbeck.
The HIFG report forecasts 23,000 dwelling commencements – a five-year high and consistent with UDIA WA’s expectations – compared with the previous estimation of 18,500 that was forecast in November 2020.
“The forecast commencements are based on a huge response from new homebuyers to the state and federal building grants that were made available in 2020 and early 2021,” added Ms Steinbeck.
“While demand is expected to ease now that those stimulus measures have finished, we still expect underlying demand to remain in the coming few years.”
Tanya Steinbeck, UDIA WA
Ms Steinbeck said given broader factors such as strong growth in WA’s economy, low unemployment and the chances border restrictions are likely to relax within the next year or so, there is a high chance investors will be attracted back to WA.
She believes investment into the WA property market will help ease the current rental shortage. A recent housing supply report conducted by UDIA reveals that housing affordability will remain under threat without an adequate supply of land for new housing and available development sites.
“Across the Perth and Peel Region, large parcels of zoned and serviced land with workable development constraints and the capacity to provide a high volume of lots are increasingly difficult to source.”
“The requisite approvals are becoming less certain, often adding considerable time, risk and therefore cost to the process of delivering new lots and housing to the market.”
The UDIA intends to propose several measures in their state budget submission next week to address how the WA government can support industry to deliver new homes to ease the rental crisis.
“Our recommendations will include tax incentives for investors and build to rent projects, facilitation of targeted housing supply, infrastructure investment and a population strategy to promote skilled migration,” Ms Steinbeck said.
“Government, industry and the community all need to work together to ensure that Perth can remain an affordable and attractive place to live, work and invest.”