December Quarter 2010 - Western Australian Planning Commission

Department of Planning – December Quarter 2010
SUMMARY AND KEY FACTS
Housing Market and the Economy
The outlook for the Western Australian economy appears positive with the Chinese economy, a major
driver of growth in the State, growing by approximately 10% per annum over 2010 1 . Solid demand for
minerals and other resources, mainly from China and India, will continue to be the key driver of growth
and income in WA and Australia throughout 2010-11 and at least for most of the next decade with a
number of new mining projects such as the Gorgon gas project and BHP Billiton’s iron ore expansions
going ahead. Consequently, employment in WA increased over the past year, with the seasonally
adjusted unemployment rate remaining below 5% since the beginning of 2010 2 .
Although there has been some increase in dwelling approvals in 2009/10 over 2008/09, demand for
housing remains subdued. The median dwelling price had a succession of increases from the
December quarter 2008 until March quarter 2010 across the entire State. It has subsequently fallen in
each quarter until the present time in the Metro/Peel 3 Region, with the remainder of the State also
displaying a negative trend but with some stabilisation in the current quarter. The preliminary median
price for the Perth/Peel Region in the December quarter 2010 is $475,000 while for Regional WA it is
$380,000.
In terms of land release over the previous financial year, final residential lot approvals decreased by
about 900 lots to 8,371 lots in the Perth/Peel Region. Declines in final residential lot approvals in
country regions were almost of the same magnitude (960) but relative decline was much higher, being
27% over the previous financial year, 2008/09.
The property market contracted in the last three years. Although some growth in residential
construction is forecast for the next two years, the consequences of poor housing affordability
(substantially reduced disposable income and consumption level of first homebuyers due to high
housing costs) may become more manifest especially if accompanied by declining immigration levels.
Housing Activity
• The December quarter 2010 figure of 5,793 housing loans for owner-occupied dwellings in WA
continues a small upward trend that has been occurring over the last six months but is still only
consistent with loan numbers last seen in 2000.
• Dwelling approval numbers rose slightly in the December quarters 2010 and totalled 5,503
overall. When considering the components of this total, the number of approvals for houses
dropped between the September (4,658) and December (4,427) quarter but approvals for other
dwelling types rose from 812 to 1,076. Total approvals for Perth/Peel dropped from 4,202 to
4,187 over the quarter but the rest of WA saw an increase from 1,268 to 1,316.
• By the end of the September quarter 2010, the number of dwellings under construction in
WA had decreased by almost 400 to 18,493 over the end of June quarter which ended the
upward trend experienced in the previous three quarters.
1
Source – Reserve Bank of Australia, Statement on Monetary Policy (February 2011).
2
Source – Australian Bureau of Statistics, Labour Force Australia (Cat 6202.0 February 2011).
3 Metro/Peel Region is defined as the Perth Metropolitan Region and the local authorities of Mandurah and Murray.
1