Data published by the Australian Bureau of Statistics today show dwelling starts in the September quarter 2012 increased a seasonally adjusted 23.6 per cent to 5,166, its highest level since December 2010.

UDIA (WA) CEO Debra Goostrey said that a number of leading indicators suggest residential construction is expected to strengthen in 2013.

“Rents increasing more than 10 per cent per annum and declining mortgage costs have made home ownership more attractive in Perth,” said Ms Goostrey.

“First home buyers absorbed significant levels of established stock in 2012, allowing existing home owners to make the switch to new homes.”

Figures published this week showed that the number of First Home Owner Grants (FHOG) paid in Western Australia increased 28 per cent to 17,171 in 2012.2 Property listings in Perth fell from more than 13,000 to 9,300 over the past twelve months.

“Late last year, the number of housing construction permits increased strongly to its highest level since early 2010,” said Ms Goostrey.

Data published by the Australian Bureau of Statistics last week showed private sector house approvals increased a seasonally adjusted 6.8 per cent in November, the sixth increase in seven months.

Ms Goostrey said that if approvals remain at levels experienced before Christmas, 2012/13 will record around 22,000 to 23,000 dwelling approvals in the state.

“Housing starts are expected to increase around 20 per cent after housing construction in 2011/12 reached its lowest level since the introduction of the GST,” said Ms Goostrey.

Last year a joint industry and government body, the Housing Industry Forecasting Group, forecast dwelling commencements in Western Australia will increase 20 per cent to 21,000 in 2012/13 on the back of strong population growth, increased housing activity and tightening rental conditions.

Ms Goostrey said that an increase of more than 20 per cent year-on-year is significant given capital and labour requirements have to compete with more than $140b of committed resource and infrastructure projects in the state.

“Should there be a stronger appetite for new dwellings, the industry may not be able to meet supply in the short term,” said Ms Goostrey.

“Industry professionals continue to cite a slow approvals process and difficulty funding infrastructure as two of the biggest constraints to the timely provision of residential land.”

“As the housing market shifts into another gear, it’s not in the State’s best interests for land delivery to be delayed by an inefficient approvals system.”