Chipping away at barriers to WA’s housing supply

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Thursday 11 May 2023

MEDIA RELEASE

Chipping away at barriers to WA’s housing supply

The state government has demonstrated its commitment to fixing the housing supply crisis by chipping away at the barriers in the way of new home starts in today’s state budget.

The state budget predicts population growth of 1.8 per cent in 2023/24.

Property Council WA executive director Sandra Brewer said based on future forecasts, WA expects to see upwards of 100,000 people arrive in the next few years.

“Projected population growth is welcome news for industries facing dire worker shortages but underlines the urgency of efficient housing supply,” Ms Brewer said.

Today’s state budget provided some optimism for apartment construction, with the announcement of a $33 million concession to replace the off-the-plan transfer duty rebate.

Combined with recent announcements to improve planning approvals and fund the provision of site infrastructure, the stamp duty concession reduces a further barrier to housing supply.

“Stamp duty is a huge impost when buying a house, and today’s budget is great news for buyers considering an apartment,” Ms Brewer said.

“For people considering downsizing, rightsizing, or moving into a brand-new apartment, it’s good news. For many buyers of off-the-plan apartments valued at up to $650,000, they won’t pay stamp duty at all. For the average 2-bedroom, 2-bathroom apartment it’s a 50 per cent discount to stamp duty.

“The stamp duty reforms go some way to supporting housing diversity, to encourage more medium density style apartments in suburbs close to the city.

“The big change that will benefit buyers is they no longer have to pay the stamp duty upfront, only to apply for a rebate to be refunded when their apartment settles,” she said.

A clear barrier to investment in rental stock has been the Foreign Buyer Surcharge, which since its implementation has reduced the volume of pre-sales in apartment buildings, resulting in less projects commencing construction. Today’s budget seeks to solve that by extending the stamp duty concession to foreign buyers.

According to Urbis Apartment Essentials, there has been a jump of late in marketing prices for apartments as developers need to cover the costs of inflation, interest rates and construction costs. The state governments budget measures seek to address these issues and make it easier for people to buy.

“The state government’s efforts to chip away at the barriers to housing supply, by funding headworks infrastructure, attracting building and construction workers and reducing stamp duty for buyers is welcomed and necessary to support future construction,” Ms Brewer said.

The state budget announced record high investment in road, rail and transport infrastructure, including nearly $5.9 billion dedicated to Metronet.

“The impact of the high level of Metronet infrastructure investment on worker availability in the private sector, particularly residential construction. It’s comforting to see that this spending will peak in 2023-24, but ease in the outyears,” Ms Brewer concluded.

ENDS

Media contact: Megan Lack | 0449 252 380 | [email protected]