The state government of Western Australia has unveiled a $150m housing investment package in an effort to boost the residential building sector.
The news could not have come at a better time for the residential building industry, which has already reported a 50% reduction in pipeline as a result of the COVID-19 outbreak, said Cath Hart, executive director for WA at the Housing Industry Association (HIA).
"Supporting and sustaining job-creating sectors such as construction through the pandemic will be vital for economic recovery. It will create much-needed additional activity across the residential building supply chain," he said.
Around $19m of the package will be allocated for 200 additional shared-equity homes. These will be delivered in partnership with Keystart.
The Housing Industry Forecasting Group recently reduced its forecast for new dwelling commencements in WA for 2019-20 by 19% – from 15,500 to 12,500, the lowest level ever, adjusting for population.
"This downturn will hurt businesses and workers in the home-building supply chain over at least the next 12 months. Unfortunately, many in our industry are not eligible for the JobKeeper safety net because of the way state governments regulate home-building progress payments," Hart said.
Latest figures from the Real Estate Institute of Western Australia (REIWA) show that the Perth residential property market is already feeling the impact of sluggish building activity.
Damian Collins, president of REIWA, said the number of properties for sale and rent has already hit a six-year low.
"Perth's property market has been showing signs of recovery since October 2019, and while COVID-19 may delay this, it most likely won't stop it," he said. "The state's economy is coming back much quicker than many experts thought, and as long as it continues to recover, it is unlikely the property-market recovery will be reversed."
Collins said the limited stock will help support prices. He said the average discount accepted by sellers has reduced to 7%, lower than last year.
"If we were in a struggling market, we would see this number higher as sellers accepted lower than normal prices," he said. "There should not be any major downward price pressure, and it is likely that the current median sale price will remain relatively stable over the coming months."
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