people in WA choosing to build rather than renovate
The Housing Industry Association (HIA) has revealed residential construction in Western Australia is growing at record pace, but renovations are still falling behind. This points to a tendency for people to invest in upgrading to new two storey homes, rather than renovating their current properties.
On February 23 the HIA released its Western Australia Outlook - a comprehensive snapshot of the state's home building sector. The results indicate that the local industry is doing well to meet the demands of a growing population.
"With 2014 likely to see the new home building cycle peaking at an all-time high, the outlook for the state's new home building remains positive," said HIA Executive Director, Western Australia, John Gelavis.
The HIA has forecast for new home building in WA to experience its third consecutive year of growth for the 2014/15 financial year - a further increase of 2 per cent is expected to make a total of 29,853 starts for the year. The expectation is that building activity will slow down in the following years, as the cycle moves in its natural ebb and flow pattern. For those considering a new home build, this busy time could be the perfect opportunity to start your project.
The market for renovations investment has unfortunately not recovered this year and is expected to dip by 4.7 per cent for the financial year. With the current record low interest rates, this could be a reflection of people seizing the opportunity to build brand new, rather than update their existing homes.
With the construction industry in Western Australia building on the record level of approvals for 2014, as reported by the HIA earlier this month, it seems that there will be a very busy period ahead for tradies, homeware retailers, real estate agents and home buyers in the state. These kind of flow-on effects showcase the multiplier effect of the building sector, helping to boost the economy well beyond the simple cost of construction inputs.