Building starts in WA tipped to rise almost 60 per cent by 2029, says Oxford Economics Australia

WA could be facing another building boom with total building commencements in the State set to rise almost 60 per cent by 2029, Oxford Economics Australia says in its latest forecast. It also projects residential completions in WA will increase by a third over the next five years with the State and Queensland both primed to outperform during this period. Despite this, forecasts in the company’s Building in Australia report show WA will have a stock deficiency of about 20,000 homes in five years — down from an estimated deficiency of 30,000 this year — and the nation will fall short by about 22 per cent of its housing target of 1.2 million. Report author and Property and Building Forecasting head Timothy Hibbert said even though the 2025 financial year would remain soft, national total building construction was set to rise from 2026 and hit a record level of activity by the end of the decade. “In WA, we can already see momentum coming through in the latest approval data. It is nation-leading and it’s the first State that looks like it’s fully gone into recovery for detached housing,” Mr Hibbert said. “There are capacity constraints on the industry and we do expect that to provide a limiting factor in the short-medium term, but we do expect the supply side of the market to gradually adjust and see improvement, especially as we move into the calendar year of 2026 and 2027.” Mr Hibbert said that while a 60 per cent rise in total building commencements over the next five years was a significant uplift, it was important to note WA was coming off quite a soft base. “We think that of all the States, Western Australia may be actually one of the best placed to meet its individual housing targets,” he said. “It went through a relatively tough patch after the mining boom so it’s coming off a soft base, which is the inverse of some of the east coast States which are coming off a higher base and we suspect that it’s more likely to have more achievable targets than some other regions.” Despite strong forecasts for WA’s building sector, Mr Hibbert said the real challenge would be keeping pace with WA’s “phenomenal” population growth, which was why a supply deficiency of 20,000 was forecast in five years. “Stock deficiency numbers are an estimate that we come to in terms of the required housing needed to drive a balanced market at that point in time and ultimately in Western Australia, you’ve had a scenario of a very strong population growth rate over the past year or two now, which is really stoking the demand side of the market,” Mr Hibbert said. “On the supply side, we’re kind of butting up against what was a pretty big slide in activity volumes through the financial year 2020, 2022 and 2023, so the mix of those two has built up substantial, pent-up requirements for housing.” Nationally, total building construction is forecast to climb 39 per cent over the four years to FY2029, reaching a record $169.3 billion. According to the report, attached dwellings are forecast to join the upswing from the 2026 financial year, with support from falling interest rates, the upward rebasing of rents, co-ordinated social housing investment, and planning tweaks in key markets. Meanwhile, momentum across all build forms is geared to continue over the three years to the 2029 financial year., with total commencements rising a cumulative 33 per cent to 241,900 dwellings — a level marginally above the previous record high set in 2016.