The housing industry is demanding a new stimulus package to prop up the property market with the Perth median house price falling almost $4000 in the past three years.
With new forecasts that the number of new home starts in WA will fall 17 per cent this year, the Housing Industry Association wants the Federal Government to entice buyers back into the market, force States to slash stamp duty on property and ditch its carbon tax plan.
RP Data-Rismark figures out yesterday show how much Perth property prices have gone backwards since the market peaked.
In February, the median price fell 0.2 per cent to be 4 per cent lower than a year earlier. At $480,000, the median price is 0.7 per cent lower than in December 2007.
The HIA, in its national outlook, predicts starts nationally will fall 15 per cent this year to just 143,000. Most analysts believe at least 180,000 new homes are needed each year to keep up with population growth.
HIA chief economist Harley Dale said housing starts had increased just twice in the past decade despite record immigration and record low levels of home affordability.
"The housing supply crisis is on us now and without proper leadership from the Federal Government, it is only going to escalate," he said.
The association's forecasts are already borne out in figures from the Australian Bureau of Statistics, which show a 7.4 per cent drop in February approvals. House approvals were up marginally but they dropped 20 per cent for units.
While WA home approvals have been steady for four months at 1400, approvals for units and apartments have collapsed.
Rismark managing director Christopher Joye said the fall in prices was making the market much more affordable. Since 2003, average household incomes had climbed 11 percentage points more than average house prices.
There are signs the retail sector is rebounding. ABS figures show a 0.5 per cent lift in retail sales in February, including a 1.6 per cent lift in WA, where more food was sold and furniture sales were up 4.4 per cent.
CommSec chief equities economist Craig James said the flatlining of house prices would give the Reserve Bank heart.Rate rises in 2010 took the heat out of the housing market, ensuring normal supply and demand fundamentals were balanced across capital city markets.
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