THE RENTAL SQUEEZE AND THE PREDICTION BY THE ANZ THAT WESTERN AUSTRALIA WILL BE SHORT 90,000 DWELLINGS BY MID THIS DECADE MEANS THE SUPPLY OF AFFORDABLE HOUSING REMAINS A KEY ISSUE FOR THE STATE
Whilst welcoming the announcement today by Minister Redman and Minister Day on the new partnership between the Department of Housing and MRA to collaborate to deliver affordable housing, the Urban Development Institute of Australia (UDIA) expressed concern that government was still not addressing the heart of the issue.
“The government states that they have delivered 6,200 affordable dwellings since the launch of the State Affordable Housing Strategy in 2011 but the figures are very different if you look at how many public sector dwellings have been commenced,” said UDIA WA CEO, Debra Goostrey.
According to ABS data, since coming to government there have been 4,779 dwellings commenced by the public sector. Since the strategy was launched in May last year there have only been 750 public sector dwelling commencements.
“A significant proportion of the 6,200 dwellings were funded through the Federal government’s GFC stimulus package and were completed after the strategy was launched,” said Ms Goostrey.
“We are well aware that the government is working with not-for-profit housing organization to deliver housing that is not included in the ABS statistics and that other strategies are being employed with the private sector through the National Rental Affordability Scheme (funded by the Federal Government) and the very successful shared equity scheme, but more needs to be done.
“The market is moving now for people who can afford to buy their own homes but we need the investors to relieve pressure on those being squeezed in the current tight rental market,” said Ms Goostrey.
“The internet means that we are now in a national and international market for residential investors and we need to make sure that we can compete on that larger stage. That means taxation reform.”
If a new property in Western Australia is bought “off the plan” or as a completed dwelling it attracts both State (Stamp Duty) and Federal (GST) taxation on the whole transaction. If you buy a house and land separately GST is applied to the house and stamp duty applied to the cost of the land. Other states have modified their taxation arrangements to recognise this barrier for rental investors.
“We need the government to undertake a taxation review as a matter of priority to ensure that we can attract investment into the rental market,” said Ms Goostrey.
“We are also calling on the government to conduct an whole-of-government review of the approvals process.
“The last whole-of-government review was conducted by the Labor government but not concluded before the 2008 election so was never released.
“We must get smarter and more efficient about housing and land supply if we are to meet the government’s target.”
Figure 1 – Public sector dwelling commencements during Barnett Government, Western Australia
