The Australian property market has already cooled according to previous reports. Prices have slackened in markets like Brisbane, Adelaide and Perth. However, even if the prices have decreased in Perth, there are still homeowners who believe that their properties have appreciated. And they probably would not see this reality for some time.
Soon, the homeowners will realize that the market activity in Perth is already passive. New home developments are still low and according to Domain, continue to decline. In support of this claim, it was reported that the latest ABS data shows that only 1,185 houses were approved for construction in this Western Australia city last December. It is believed to be the lowest monthly total ever seen since February 2013.
The number of approved home buildings in Perth has dropped by 2,826 (13.9 percent) in 2015 from 20,288 of 2014 to only 17,462. Last year's total was the lowest since 2012. The number of developments for the apartment sector has also slid down to 367 which is also the lowest since May 2014.
According to Domain, housing construction is an important feature in the Perth economy. It is suspected that the recent downturn in the mining sector, which lead to the loss of jobs and decreased household funds, has negatively affected demand for new housing in Perth. This in turn has driven home prices down which many could not yet see.
On the other hand, even with the slackened home construction, Perth is still third, behind Sydney and Melbourne, in terms of having the most number of homes built. With this one can most probably imagine how other oil-hit markets, such as Pilbara, are doing in terms of demand and supply of new housing.
Now with rising unemployment in Perth, it is not farfetched to say new home developments will continue to sink.
