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The Property Market: Housing and Trade Shortage Set to Hit

The property investment market could prove fruitful for new investors

The tables are turning and a 14 per cent jump in block sales in the September quarter, combined with a predicted housing shortage in Perth, indicates confidence is returning to the property market in Australia and new home starts in WA are expected to jump over the next year with the Housing Industry forecasting a 20 per cent increase in the construction of new homes in the twelve months to June next year in the property market.

The increase is fuelled by the tight rental market and the influx of 1,200 adults moving to the state each week. About 98,500 new dwellings were built in Perth from 2006-11 to accommodate 284,000 additional residents highlighting a shortfall in accommodation and conditions are set to tighten further with Perth’s population forecast to double to 3.4 million by 2056. This will influence the Australia property market in profound ways.

Perth is on average building new homes faster than any other city in Australia but the predicted increase in building activity and pent-up demand for new homes would soon be unleashed on the investment property market, putting pressure on the industry and trades.

Dale Alcock, Managing Director ABN Group, said the industry was expecting a trade shortage and construction programs have the potential to lengthen if the industry suddenly needs to respond to a jump in demand following softer property investment market conditions in recent years.

‘The industry shrunk 15 per cent in the downturn and many qualified trade workers have transferred to other industries such as mining whilst employers have failed to train new apprentices which has the potential to create a trade shortage,’ said Mr Alcock. But Dale believes the ABN Group is well positioned to respond to any delays caused by trade shortages in the property market.

‘If demand returns to levels experienced three to five years ago, build times could blow out 30 to 40 per cent in as little as six months but at the moment we are monitoring conditions and adjusting staff levels to respond to the current increase.’

‘The ABN Group has been in the home building industry for over 30 years so we have seen all types of conditions and continued to deliver timely service to all clients.

‘The good news is that we have identified the current trade shortage early so we are aware of it and we are working with our contractors to minimise the impact on home builders.’

Despite the potential for construction delays, Dale believes the current investment property market presents excellent opportunities for investors.

‘There is a significant growing need for accommodation in Perth and interest rates are the lowest they have been since 1990 so if investors are able to partner with a reputable builder, building an investment property could prove very rewarding in the current climate,’ Dale continued.

‘Conditions are probably the best investors will see them for a long time so now is an opportune time for first-time investors to get their foot in the door or for experienced investors to expand their portfolio.’

For further information regarding investment opportunities available in Perth and regional Western Australia, contact Investor Assist on (08) 9200 7200.

 

View some of the investment properties currently available in the property market.

 

DISCLAIMER: This information is of a general nature only and does not constitute professional advice. We strongly recommend that you seek your own professional advice in relation to your particular circumstances.

 

Related

Dale Alcock

Position: 
Managing Director, ABN Group
Dale commenced his career in the building industry as an apprentice bricklayer. He later joined partners John Webb & Garry Brown-Neaves in 1987 to establish Dale Alcock Homes. Today, as the Managing Director of the ABN Group, Dale has been instrumental in the spectacular, yet controlled, growth of the ABN Group and has grown to be one of the most recognised names and faces in the industry.