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REIWA welcomes Government boost to housing supply in 2023-24 budget

Posted 17/5/23

REIWA CEO Cath Hart has welcomed the McGowan Government’s measures to address housing supply in the 2023-24 budget.

“The big question in assessing housing policy in this market is whether it will increase the amount of homes that can be built, bought or rented, and the Budget announcements tick those boxes,” Ms Hart said.

“The Government has committed to building more residential and social housing through a range of initiatives, and while they will not solve the supply issue overnight, they are a step in the right direction.”

Ms Hart noted demand for housing was set to remain strong, with upgraded forecasts for population growth from 1.5 per cent to 1.8 per cent in 2023-24, and from 1.6 per cent to 1.7 per cent in 2024-25.

Housing supply and diversity

Housing supply and diversity received a boost with the extension of the off-the-plan duty rebate.

“We are very pleased to see $33 million allocated to the off-the-plan transfer duty rebate,” Ms Hart said.

“The scheme was due to end in October 2023 and this will see it extended until June 2025. The thresholds have increased and the rebate has been changed to a concession, meaning buyers will receive an immediate discount on settlement, rather than claiming the cost back.”

The changes to the threshold will see buyers receive a 100 per cent concession on properties valued up to $650,000, versus $500,000 currently. From $650,000 to $750,000, the concession will taper to 50 per cent and will be capped at $50,000 for purchases over $750,000.

“This is a significant saving for buyers and will encourage off-the plan purchases, supporting development of these projects. This will increase housing diversity and supply, and provide more opportunities for people to buy a home,” Ms Hart said.

The budget also included $48 million to facilitate medium-to-high density urban infill in Bentley, with $11.3 million to be spent on remediation works.

$55 million has been allocated for upgrades to water infrastructure to unlock housing development across Perth.

Building more homes

The Budget allocated $47.6 million to boost WA’s building and construction industry through more training and support for apprentices, and attracting skilled trades.

“WA’s growing population has pushed demand for homes to buy or rent to high levels since COVID, with stock being snapped up within 14 days (for sale) and 16 days (for rent) of being listed on www.reiwa.com,” Ms Hart said.

“At the same time, delays in new home building completions caused by labour and material constraints over the past couple of years has meant the supply of housing has just not kept up with demand.

“This two-pronged approach to boosting the number of tradies to build WA homes will help all aspects of the market, whether it’s social housing, new and established homes or people looking for investment properties that they lease to tenants – helping to fill the gap in the rental market.”

Social housing and homelessness

The Budget featured $511 million for social housing and homelessness initiatives, including $450 million in additional funding for the Social Investment Housing Fund, $49 million for a pilot 100-home Regional Supportive Landlords Model, and funding for the Office of Homelessness to support the delivery of the Government’s 10-year homelessness strategy.

The Government aims to deliver 4,000 new social homes over two budgets and refurbish thousands of others.

“Investment property owners have been exiting the WA market in droves with nearly 20,000 fewer rentals available in WA now than January 2021. We know that a shortage of private rentals always puts enormous pressure on social housing, so these initiatives are a welcome move,” said Ms Hart, who is a member of the Government’s Homelessness Advisory Group. 

“About 85 per cent of WA’s rental stock is provided by mum-and-dad investors but their exodus from the market over the past two years has seen our rental vacancy rate fall to a 42-year low – this creates challenges across the entire housing continuum but has a disproportionately larger impact on the most vulnerable in our community.

“With the Government announcing another Budget surplus, it is in a fortunate economic position to support the community. The investment in social housing is essential to increase housing supply and put roofs over the heads of the most vulnerable Western Australians.”

Energy bill relief

The Budget includes a $400 energy bill credit for all households, plus an extra $426 for households eligible for the Energy Assistance Payment. The Hardship Utilities Grant Payment Scheme will be increased by 10 per cent for those who are in financial crisis and unable to pay their utility bills.

Small businesses will receive a $650 credit on their power bills.

State Budget fundamentals

The WA Government announced:

  • A $4.2 billion surplus for 2022-23
  • A $3.3 billion net operating surplus forecast for 2023-24
  • 4.25 per cent economic growth in 2022-23, the strongest in nine years, with 2.25 per cent growth forecast in 2023-24
  • An unemployment rate of 3.4 per cent at March 2023, forecast to be 3.5 per cent by the end of the financial year
  • Inflation set to fall to 3.5 per cent by June 2024
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Author: REIWA
Source: REIWA

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Bailey Devine Real Estate

Bailey Devine Real Estate