WA Residential Building Sector On The Road To Recovery

Western Australia’s residential building sector is likely to bounce back to pre-pandemic levels in the next year, according to latest forecasts from the Housing Industry Association WA. 

The peak body had expected a reduction in construction activity to hit the state by late June, but federal and state stimuli announced in recent weeks has led to a brighter outlook.

The association’s latest industry-wide survey of residential builders in the state shows the WA Building Bonus grants sparked a 132% rise in the number of groups visiting display homes.

WA’s residential building sector is tipped to bounce back to pre-pandemic levels in the next year. Picture: Getty

HIA WA executive director, Cath Hart, said the new forecast showed a “solid recovery” for residential building starts in WA with the advent of the stimulus packages.

“We now expect the September quarter to be the bottom of the prolonged downturn in residential building in WA, which started in June 2014,” Ms Hart said.

“After six of the toughest years on record, there were signs of recovery in early 2020 when we were expecting to build nearly 20,000 homes but this was slashed to fewer than 10,000 new dwellings when COVID-19 struck, as a result of low international migration and rising unemployment.

“We now expect 15,950 dwelling starts in WA in 2020/21 following the announcement of WA’s Building Bonus and the federal government’s HomeBuilder scheme, plans to cut red tape in building approvals and the campaign to encourage interstate FIFO workers and their families to permanently settle here.

“We’re already seeing the positive impact of the Building Bonus on jobs and activity, with the larger builders advising they expect all staff to have returned to pre-COVID hours by the end of June.”

Earlier this month, the WA government announced the $20,000 grants – on the back of the $25,000 HomeBuilder grant from the federal government for owner-occupiers who build or substantially renovate their homes.

West Australians embarking on new home projects can now potentially access up to $45,000 in grants as well as other concessions.

The WA government also expanded the 75% off-the-plan transfer duty rebate, capped at $25,000, to include purchases in multi-tiered developments already under construction in addition to pre-construction contracts.

Satterley chief executive, Nigel Satterley, said government stimuli had led to greater activity in the market, with first-home buyers comprising about 70% of enquiries.

“There has been an overwhelming increase of enquiry since the announcement of the HomeBuilder grant and the WA Building Bonus. Typically, our display villages would see 20-30 groups over a weekend and at the moment they are seeing 80-plus,” Mr Satterley said.

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“We have had a massive increase in web leads and our sales staff are receiving dozens of phone calls a day.

“This level exceeds the volume of walk-in and phone traffic seen in the 2012-2015 housing boom.”

new home

Various government stimulus packages are encouraging first-home buyers to break into the market. Picture: Getty.

ABN Group executive general manager for residential construction, Dean O’Rourke, said there had been a strong resurgence in enquiries for new builds since the grants were announced.

“It’s been very positive,” Mr O’Rourke said. “It’s probably been exacerbated with the whole COVID experience where it’s been very hard to go through displays to then post-COVID and the restrictions being reduced. There are definitely high levels of traffic, which is really good.”

“The first-home buyer and large family home buyers jumped out of the blocks really quickly. They saw the opportunity.

“It’s exciting. There’s good energy, good enthusiasm and excitement around, especially given how it’s been over the last four or five years, which have been quite challenging.”

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