According to the analysis of the Urban Development Institute of Australia (UDIA), the housing market in Western Australia is expected to recover within 12 to 18 months, according to the data of the Australian Bureau of Statistics published over three decades.
Tanya Steinbeck, executive director of UDIA WA, said the institute was monitoring the real estate market cycles in Washington over the last 30 years and found that cycles in that state ranged between 4 , 5 and 8.75 years, with an average duration of five years during this period.
Realestate.com.au also reported that, as part of the research, UDIA had discovered a clear relationship between mining exploration expenditures and housing starts figures, particularly since 2007.
UDIA reviewed ABS data on housing starts, building approvals, and WA housing finance commitments over the last three decades to compare the current market previous market.
According to Steinbeck, there is a significant gap of two years between an increase in mineral exploration expenditures and a corresponding increase in housing starts in WA.
Based on current mining exploration spending figures, UDIA estimated that the next market recovery will take place in the next 12 to 18 months.
Steinbeck also said that the next spike in housing started throughout the state should take place between the middle of 2020 and 2022.
While the current slowdown has been longer than expected, it is well within the average time range of historical market cycles.
"The duration of the current slowdown is in part due to the fact that the peak of 2014 is the highest ever recorded through the data reviewed," Steinbeck said.
Steinbeck said that the positive signs and timing of an economic recovery were good news for the real estate sector, which has a major impact on the health of the entire the economy of the state of Washington.
However, Steinbeck warned that several factors could affect the recovery. These include the Royal Bank Commission and possible changes to negative debt and negative debt after the May federal election. The addition of a surtax for foreign buyers last year has not yet been taken into account, which has not been seen.
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