Page 6 - REIWA.com Market Update / June Quarter 2017

WA ECONOMIC OVERVIEWPOPULATIONSince the release of the 2016 Census results, population estimates by the ABS have been revised somewhat. As at December 2016, there were 2,567,788 people living in Western Australia. This represented 10.5 per cent of all Australia’s population. The latest population gures by the ABS reiterate the continued headwinds faced within the WA economyand residential market. In the year to December 2016, WA attracted 2,097 migrants. This was signi cantly lower than the 67,094 increase seen during the year to December 2012. Current population growth levels remain so , with overall growth recorded at 0.7 per cent (year to December 2016). The State Budget Papers reveal slightly better forecasts for overall population growth in the forward years up to 2019-20.20,000 15,000 10,0005,0000-5,000Net Overseas Migration WA (LHS)INTEREST RATESSource: ABS 3101, 2016 - 17 Budget Paper No.3 3,000,000 2,500,000 2,000,000Net Interstate Migration WA (LHS)Natural Increase WA (LHS)1,500,0001,000,000500,0000Estimated Resident Population (RHS)The o cial cash rate remains at a record low of 1.50 per cent since August 2016. Current Australian Futures Markets projections are for interest rates to remain at or near current levels for the next 12 months. The extended period of low rates will continue to provide comfort to the local residential market in the form of lower lending rates which should spur investment in housing. However, recent regulatory measures introduced by the Australian Prudential Regulation Authority (APRA) may have serious negative implications on future lending, especially to investors.8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0Source:ABS CAT 6401, RBA CAT F5, 13RBA Cash RateOwner-occupier Fixed Lending ratesOwner-occupier Variable Lending ratesPerth Inflation Rate (YoY)DWELLING COMMENCEMENTSRolling annual dwelling commencements have contracted by 21 per cent in comparison to the same time last year. This is good news for the established market and the slowing rate of new stock being built will allow for existing stock to be absorbed. The Housing Industry Forecast Group forecasts that commencements for 2016-17 will settle at 19,000 a er which increments of 2,000 have been projected in the forward estimates up to 2018-19.9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,0000Source: ABS 8752Dwelling Commencements (WA)6 | REIWA.COMMARKETUPDATE | JuneQuarter2017Mar-2012 Jun-2012 Sep-2012 Dec-2012 Mar-2013 Jun-2013 Sep-2013 Dec-2013 Mar-2014 Jun-2014 Sep-2014 Dec-2014 Mar-2015 Jun-2015 Sep-2015 Dec-2015 Mar-2016 Jun-2016 Sep-2016 Dec-2016 Mar-2017Jun-2012 Aug-2012 Oct-2012 Dec-2012 Feb-2013 Apr-2013Jun 2007 Dec 2007 Jun 2008 Dec 2008 Jun 2009 Dec 2009 Jun 2010 Dec 2010 Jun 2011 Dec 2011 Jun 2012 Dec 2012 Jun 2013 Dec 2013 Jun 2014 Dec 2014 Jun 2015 Dec 2015 Jun 2016 Dec 2016 Jun 2017 (f) Dec 2017 (f) Jun 2018 (f) Dec 2018 (f) Jun 2019 (f) Dec 2019 (f) Jun 2020 (f)Jun-2013 Aug-2013 Oct-2013 Dec-2013 Feb-2014 Apr-2014Jun-2014 Aug-2014 Oct-2014 Dec-2014 Feb-2015 Apr-2015Jun-2015 Aug-2015 Oct-2015 Dec-2015 Feb-2016 Apr-2016Jun-2016 Aug-2016 Oct-2016 Dec-2016 Feb-2017 Apr-2017Jun-2017PERCENTAGE (%)