Construction levels dropping

The sign your suburb is in serious trouble

Does that mean that soon the plumber or electrician or handyman thats promised to do your job on Monday or come and quote is actually going to turn up? and if he doesnt and you call him, he isnt going to get angry with you for wasting his prescious time

Or tell you that your job isn't worth their time after they've agreed to do it?

I am waiting for the time to come!

 

News.com.....

I have added an arrow to show the steep drop trend.

 

You’ll be waiting awhile @TMNT

There has been drastic decrease in new construction starts for three years in Perth and you are still lucky if you get a trade turn up.

 

Why is that? Shortage of workers?

 

This is good news...rents should go up....usually they over correct..and it will take years to turn on supply than to cut it......

Rents to rise, house prices to decline under Labor’s negative gearing policy: SQM

 

Not really.
Mainly a very belatedly left over princess attitude from people that used to be able to pick and choose work and forgot that they need to work to earn any money. They like to sit around whinging there's no work but don't answer their phone, don't do quotes for small jobs and have zero customer service.
The rest of them went back to where they came from after the work dried up here - ie back to eastern states.

 

House prices have been falling for roughly the same amount of time (extra supply does not dampen prices it signals that prices are rising)

This is the longest downturn in the 20 years

The population of WA is now over 600k larger than it was in 1998

Five years after dwelling completions started to fall there is still a rental oversupply ( although it’s starting to tighten now)

There are still more properties for sale than in what we might consider a balanced market

Thousands of construction jobs have been lost contributing to WA’s highest in the nation unemployment rate but offset by strong outward migration since the downturn began


The last twenty years of data suggest that when dwelling commencements increase again they will rise quickly.

This suggests that prices will rise relatively quickly too but;

The last twenty years is not necessarily a great predictor of the near to medium term future.

 

Because they pick and choose what jobs they will take on.

 

Great news, falling construction just sows the seeds of the next boom. We were already struggling to meet new housing demand, a couple of years of underdevelopment will make the eventual turnaround much sharper and as noted by @sash it always takes years after for a supply side response once a recovery kicks in.

 

Yup you can see that Perth's massive up and down controls or is controlled by the market. We've now had 4 years of falling construction and slowly eaten away the oversupply and will be heading towards under supply

Sydney probably has a way to go though to really make a dent in supply.

 

All those ups in the chart I posted came with a demand side spike though.


- In the early 2000s, big population inflow and weak AUD

- After the GFC lower interest rates and FHOB priming the demand pump

- 2011-2014 second mining boom


What demand stimulus do you see presenting this time?

 

Uneducated “investors” purchasing new builds for NG benefits if Labour wins.

 

Surely the most uneducated of investors is not going to buy without a reasonable explanation of having a tenant and a decent rent?

We are some way off those conditions in Perth.

 

Surely that’s what most “investors” already currently do??? Who do you think buys these OTP garbage apartments all over Australia?
People are buying this garbage already sold on NG and Depreciation benefits.

Just imagine the marketers dream when they can compare the tax benefits against an existing dwelling without NG!! They will have a field day on the uneducated.

 

Good point.

But actually, I think they were motivated by capital gain ( given investor demand has collapsed with house prices) so we need to throw that into the mix.

 

My crystal ball doesn't see anything major, just natural state of affairs of normal population increases due to births and immigration (internal and OS)

 

And that is the case against any boom. Rental market just balances out with moderate yoy inflation and the home ownership market just ‘builds to demand’ based on pedestrian rate of population growth.

 

I never said it was going to boom though, I just said we were heading to undersupply.

 

Approvals up in February: Linky