Housing Industry Forecasting Group dwelling commencements

The Housing Industry Forecasting Group (HIFG) is an independent forum established to provide information and forecasting on the housing market in Western Australia.

September 2020

HIFG have just announced the September 2020 update which demonstrates the impact of COVID-19 on dwelling commencements and the positive effects of the Governments’ building bonus schemes.

Dwelling Commencement Forecasts  

The latest forecasting from the Housing Industry Forecasting Group has been announced, with an expected 14,500 dwellings commencements in 2019 – 2020. These forecasts are slightly down from the predicted 15, 500 from November 2019, however, the forecast is also a sign of recovery as it exceeds the mere 12,500 forecasts in April 2020 amidst the COVID-19 pandemic.

The government building stimulus packages expected to have a profound impact on the building sector with predictions as high as 17,000 commencement in 2020/2021, however, this is still below the long-term average. Given the significant impacts of the pandemic, including high unemployment and boarder closures, the HIFG has only provided a range for 2021/2022, forecasting that dwelling commencements can be anywhere from 14,000 to 18,000 dwellings.

Economic and Housing Snapshot

> Employment and hours worked have decreased.

> Reduced population growth largely due to reduced international and interstate travel.

> Consumer confidence has decreased.


> Low new house building activity, though improving as a result of the Building Bonus Scheme.

> Tightened rental market conditions.

> New home sales in July 2020 more than doubled the long-term average.

> Land and Lot sales from June to July nearly tripled the long-term monthly averages.


Industry Issues and Challenges

Concerns about the ability of the building industry to respond in time to meet the requirements of the grants, especially given such high demand within the market for tradespersons, building permits, and titled land.

Interest and demand for new multi-residential buildings have also increased with the home building grants, along with the stamp duty concessions for off-the-plan apartment developments.

What does this mean for WA?

Western Australia’s housing market has been struggling for a number of years now and amidst a global pandemic, challenges still lay ahead. We know that the current trends and trajectories of the housing market is not meeting the needs of Western Australians.

Despite the increase in forecasted new building commencements the recent figures announced by the HIFG are still below the long-term average. With the Building Bonus Schemes being the main driver for the sudden increase in housing demand and the relatively short time period of these grants, the housing industry is only going to see a short-term and short lived increase in new housing stock, and there are no measures to ensure new builds continue on an upwards trend. This will result in significant volatility within the housing market both for employment, construction, and housing prices.

Whilst these building initiatives have given the Western Australian economy a much-needed kick, this is unlikely to mean long-term stable, and secure growth for the housing industry and market.

Furthermore, with a tightened rental market and some of the lowest vacancy rates experienced in WA, there is a risk of people being forced out of the private rental market. With social housing and accommodation services at full capacity there is limited options for those in need of an affordable place to live. His could see people enter the home-ownership market in desperation, putting Western Australians in precarious positions.

To prevent such a consequential sequence of events the Western Australian Government needs to give thought to how it can better provide for housing needs in Western Australia, and how it can positively influence the Western Australian housing market to ensure it trends towards the needs of our local communities.

More consideration and action needs to be given to affordable housing solutions, not continuing to incentivise people into high debt just to achieve home ownership.


HIFG. 2020. Forecasting Dwelling Commencements in Western Australia: September 2020 HIFG Update and Media Release. Housing Industry Forecasting Group. Read here.