2012 POSED A NUMBER OF CHALLENGES BUT ALSO OPPORTUNITIES FOR THE PROPERTY DEVELOPMENT SECTOR.
It was the night before Christmas and all through the house, not a creature was stirring, not even a mouse, unless of course you live in Perth where the rental vacancy rate has dropped to less than two percent and you are having a restless night worrying about having a roof over your head. If Santa was looking at housing availability in WA there would certainly be a list of what was naughty and what was nice this year.
The Nice List
- Affordability has improved due to wages growth of 4.5 per cent, a 1.75 per cent cut in the Reserve Bank Interest rate and steady housing prices.
- Some improvements in the approvals system (unfortunately the government hasn’t used the four year downturn to comprehensively reform the approvals process).
- Release of the report outlining planned local government amalgamations which has the potential to improve efficiencies and streamline process.
- Ongoing Federal Government funding commitment to programs such as the National Rent Affordability Scheme.
- Ongoing State Government commitment to the shared equity scheme and an expansion in Keystart eligibility.
- The development of new housing product that has reduced the entry point for new homebuyers down to less than $280,000.
- Release of major plans and commencement of works on significant projects to revitalise the City including the stadium and the Perth Waterfront.
The Naughty List
- The introduction by the Federal Government of excessively high fees for applications considered under the Environmental and Biodiversity Conservation Act .
- The decision of the Economic Regulation Authority WA to burden new homebuyers with the tax on the assets that developers of new estates gift to Western Power for free.
- Cutting staff and resources at the Department of Planning and other approval agencies through the mid-year budget review which will potentially impact on approval timeframes.
- The 40 basis point gap between the reduction in the Reserve Bank overnight cash rate and what the banks passed on.
- The lack of funding for some of the public transport projects announced in 2012.
- Increasing developer levies to finance infrastructure provided by local governments.
- The failure to remove duplication in the approvals process.
UDIA remains committed to working with all stakeholders to deliver affordable, sustainable housing for a growing Western Australia. We wish everybody a happy and safe festive season.