New data from the Australian Bureau of Statistics has shown a rise in housing finance commitments in Western Australia for the third month in a row, indicating some confidence is returning to the state’s sluggish property market.
The seasonally adjusted housing finance commitments for owner-occupied dwellings for May in WA rose 3.6 per cent, following a 4.8 per cent rise in April and 2.7 per cent in March.
Urban Development Institute of Australia CEO Debra Goostrey said the figures, which were higher than the national average of 2.9 per cent, demonstrated a change in sentiment towards the property market in WA.
“Coupled with the seasonally adjusted rise of 3 per cent for dwelling approvals in May, this is a promising indication that a bit of confidence is returning to the West Australian property market,” Ms Goostrey said.
However, Australia’s largest residential building organisation, the Housing Industry Association, recently warned that home sales in WA were at ‘dangerously low’ monthly volumes.
The HIA-JELD-WEN new home sales report showed detached home sales fell by 6 per cent in WA over May, contributing to a 2.4 per cent drop nationwide.
Over the three months to May, new home sales in WA were down 5.2 per cent on the previous corresponding period.
“Housing affordability has deteriorated in Western Australia in recent years in the face of, among other factors, inadequate land supply and a consequential sluggish rate of new home building,” the HIA report said.
In addition, the HIA also predicted a sharp fall in WA housing starts in 2010-11 to 19,860, a 21 per cent decline from 2009-10.
HIA executive director for WA John Dastlik said lengthy approval processes, unnecessary red tape and the current state of the established home market were directly responsible for the declining number of housing starts.
“The established market is very lacklustre and if you take out investors and first-home buyers, about 70 per cent of the new home-building market consists of people from the established market who decide to build,” Mr Dastlik said.
Market analyst RP Data-Rismark has put the Perth median house price at $462,500.
