WA housing construction edges up

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By Robert Carry

There will be a modest yearly increase in new housing activity in Western Australia both this year and in 2010, the Housing Industry Forecasting Group (HIFG) has predicted.

According to the HIFG's latest annual report on the outlook for the Western Australian housing industry, there were a number of issues which needed to be addressed in order for house construction to accelerate.

The group pointed to a need for better information on the stock of existing vacant lots and demolition activity, which it described as being "significant components of residential land supply". Other issues included the need for better identification of unconstrained subdivision approvals and mechanisms to facilitate their development.

"Recent reports predicting another housing boom and imminent land shortage are a bit premature," said Stewart Darby, HIFG's chair. "People tend to forget how much speculative housing was built in the last boom. While there is an adequate supply of land to meet foreseeable demand, a number of critical issues do exist regarding residential land supply requiring action by government and industry."

The HIFG added that while there was significant planning reform underway, all levels of government needed to work with the development industry to prevent future bottlenecks in land and building approvals.

The HIFG has forecast that housing starts in 2009/10 will increase by 8.5% to 20,000, with a further modest increase likely in 2010/11.

Darby added, "This level of forecast activity is below the notional underlying housing demand of 24,000, based on recent population growth trends, suggesting that WA may be heading for a housing shortage. However, soft vacancy rates and the volume of dwellings still under construction should provide pressure relief across 2009/10."

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