According to a recent study by the Housing Industry Association (HIA), the real estate market in Western Australia may face a difficult year as the effects of the COVID-19 epidemic on the house construction begin to bite.
Sales of new homes in the state have already fallen 25.2% since the introduction of COVID-19 restrictions in March. At the same time, 30% of existing projects have been canceled or suspended. It was four times the normal cancellation rate of 7%.
"Overall, this is a 50% contraction of WA's residential construction pipeline due to COVID-19. A similar situation is unfolding across the country, but WA will be the first to feel the brunt of the slowdown in home construction because the past five years have been some of the worst for us, "said Cath Hart, executive director of WA at HIA.
HIA figures show that the pipeline of projects in the state before the restrictions was only 13 weeks, significantly less than the six months in other states.
"If this continues, we expect a reduction in on-site construction will start to affect WA from July – this will cause a new wave of job losses and job cuts. hours, "said Hart.
Read also: Prices could rise as vacancies remain low
The Housing Industry Forecasting Group had reduced by 19% its forecasts for new housing in WA for 2019-2020, from 15,500 to 12,500, the lowest level ever recorded, taking into account the population.
"This downturn will hurt businesses and workers in the home construction supply chain at least in the next 12 months. Unfortunately, many in our industry are not eligible for the JobKeeper backstop because of the way state governments regulate house building progress payments, "said Hart.
An overall slowdown in house construction is expected throughout Australia in the second half of the year, as the cancellation rate exceeds 30%. This figure was significantly higher than the peak of 17% recorded during the global financial crisis.
"Unlike the reopening of other sectors, the delivery time for the house building pipeline is six to nine months, so even if the economy picks up on July 1, supply of labor in residential buildings will continue to decrease until 2021, "said Tim Reardon, chief economist at the HIA.
Main suburbs:
Flemington
,
collingwood
,
newcastle
,
thebarton
,
queens park
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