Building approvals lift in Western Australia
Some Australians building their own homes have set their sights on Western Australia, according to new statistics from the Australian Bureau of Statistics (ABS).
Anyone taking out a construction home loan in the near future may be interested in the lift in building approvals in the state during September.
Approvals lift in the west
Private sector housing approvals fell 2.3 per cent in September across the country in seasonally adjusted terms, according to the ABS.
Such approvals have fallen for two months, which could put pressure on housing prices in the future.
However, WA is bucking the national trend, which could prove to be good news for residents of Perth and elsewhere in the state.
An influx of new dwellings can help ease supply shortages, potentially improving housing affordability. For anyone contemplating securing a home loan in coming months, this may be just the news to encourage them to pursue a property purchase.
During September, building approvals for detached houses soared by 3.7 per cent in WA. By contrast, multi-unit approvals fell by 2.8 per cent, the HIA noted, referring to ABS findings. This could indicate a trend towards freestanding homes rather than medium- to high-density living arrangements.
Detached housing approvals pushes activity
Housing Industry Association (HIA) Executive Director for WA, John Gelavis, commented on the recent trends, explaining the importance in the wider scheme of things.
"New dwelling approvals in WA remain at a high level, with detached house approvals being the key driver of activity. This signals that the pipeline of new dwelling activity will remain strong over the rest of the year," Mr Gelavis noted on November 4.
Furthermore, Mr Gelavis explained that WA has experienced a significant population increase over the last few years. Accordingly, it's essential that new home building activity continues at elevated levels, in order to meet this ongoing demand for housing.
Of course, this could be a challenge if land is not released quickly enough or in significant enough quantities.
"It is very important that we see steady release of more shovel-ready land in Perth and other urban centres," Mr Gelavis said.
Construction surges in WA
It's not just approval numbers that are showing promise.
A 20 per cent increase in new home construction starts between 2012-13 and 2013-14 has been praised by Housing Minister Bill Marmion.
The increase across the state means a new record has been set, with 28,966 new homes entering the construction phase during the 2013-14 year.
Mr Marmion noted that a range of factors can influence the state's economy. When times are "uncertain" and consumer sentiment is in fluctuation, construction forecasts are incredibly important.
"The housing industry is a crucial generator of jobs and a key economic driver," he explained on November 3, on the back of the release of the Housing Industry Forecasting Group report.
In the western state, every $1 million of construction investment generates three full-time jobs in the building construction industry, according to HIA research, Mr Marmion explained.
It's expected that last year's building approvals will maintain the pace of housing starts, which are currently showing plenty of promise for home buyers and investors in WA.
For the 2014-15 year, it's expected there will be 25,000 housing starts, which will help to keep up with demand for property in a state with a burgeoning population.
There are other incentives and strategies at play to help with housing supply and ease affordability issues.
For instance, the Affordable Housing Strategy has delivered over 17,000 affordable housing opportunities over its lifetime, according to Mr Marmion.
In addition to this, an increase in the First Home Owner Grant amount has helped certain buyers secure real estate across WA.
Interestingly, home sales have dropped in WA between the second and third quarter, marking a trend that's spanned five quarters so far.
Individuals buying or building in WA may consider a fixed-rate home loan in future years, should interest rates eventually lift.
Image credit: Daniel Lee