Perth has almost made it through the residential construction crisis, according to Treasurer Rita Saffioti, who will unveil a $400 housing plan as part of a mid-year Budget review that shows WA is still flush with cash.
The West Australian can reveal a Housing Enabling Infrastructure Fund will be the centrepiece of Monday’s Budget update, aiming to fast-track subdivisions in priority areas by delivering water and electricity infrastructure simultaneously.
Ms Saffioti said the funding would unlock housing supply around Alkimos, Ellenbrook, Byford, Mundijong and Jandakot by ensuring new lots are equipped with the pipes, poles and wires to fast-track residential projects.
“It’s about making sure that we can bring on new housing subdivisions without delays,” Ms Saffioti said.
“We think housing is one of the biggest issues, probably the biggest issue.
“Cost of living and housing for many people is one and the same thing, because the pressure is on rents and, of course mortgages.
“So housing is our biggest issue and that’s why we’re constantly bringing in all these new initiatives. But the good thing is . . . the mid-year review will particularly show that our economy is very, very strong and, in particular, compared to the other States.”
The economic update will reveal WA’s domestic economy is set to grow by 3.5 per cent in 2024/25, up from a forecast 3.25 per cent and Treasury is predicting growth of 5.7 per cent in future years.
In the critical housing sector, dwelling investment has swelled from a forecast 7.5 per cent to 11.25 per cent, which is the highest in the nation.
Building approvals reached 19,954 in the year to October, while every other State recorded negative growth.
Ms Saffioti said that’s proof the construction industry has turned the corner, after being hammered by worker shortages and supply constraints.
“The number of completions in 2023/24 was the highest in almost six years,” Ms Saffioti said.
“And WA has recorded the strongest building approvals of all the States, with a growth of 47.2 per cent in October. That graph is incredible.”
Land sales, building approvals and new loan commitments are all now above pre-COVID levels, after bottoming out in 2022.
When asked whether Perth is through the worst of the housing crisis, Ms Saffioti said almost.
“(We are) through the pinch point of construction, absolutely,” she said.
“We’re starting to see construction time frames normalised which is good. It’s good, in particular, for home buyers because they can have much better certainty that when they enter into a contract the house will be finished in a reasonable time frame.
“We’ve seen really good signs, the rental vacancy being 1.7 per cent up from 0.7 per cent but the other really good sign is median rents have stabilised since May.
“So I think we’re hopefully starting to see, in particular in construction activity, I think we’re past the worst of it.”
While the federal budget is staring down a $26.9 billion deficit this financial year, The West understands WA is on track to record a surplus close to the $2.6 billion that was forecast in May.
Ms Saffioti said all major economic indicators are looking good, with gross state product up from 2 per cent to 2.25 per cent and the State’s unemployment rate set to remain around 4 per cent, despite commodity prices falling.
“Since 2019 our economy has grown by 23.8 per cent and that’s above the national growth rate of 14.8,” she said.
“Household consumption is strong, dwelling investment is very strong, business investment has been strong. . . while the other States have seen falling consumption, falling retail trade, we’ve still seen quite strong domestic activity.
“So that means that there’s still some confidence out there, that people are still spending... it’s not to say there’s not challenges, and there’s a lot of challenges, but I think WA is best placed to meet those challenges.”
The four-year Housing Enabling Infrastructure Fund will make $100 million per year available to Water Corporation and Western Power, for priority projects.
Ms Saffioti, Housing Minister John Carey and Minister for Regional Development Don Punch make up the oversight committee that will decide where the money is spent.
“The (HEIF) will help deliver critical water and power infrastructure to a pipeline of residential land supply across Western Australia,” Mr Carey said.
“Once these critical headworks have been completed, more development ready residential land will be available.
“We’ve been very clear, we’re not stopping our reforms to bolster housing supply. This remains a clear priority for the Cook Labor Government.”
Critical infrastructure was a priority as of the Urban Development Institute of Australia, that predicted a $421 million spend in key growth corridors could deliver almost 90,000 new homes.
It was also a key demand of the Housing Industry Association, which has welcomed the decision.
“We need all forms of housing unlocked and available,” HIA executive director Michael McGowan said on Sunday.
“Water, sewer and power are key barriers to the availability of this land and this announcement.. will help prevent unnecessary delays.
“Investment in a strong pipeline of residential land is good for consumers, good for builders and signals that the Government is listening and wanting to work with industry to solve the current housing challenges.”
The organisation’s State election wish list, released in October, also included stamp duty reform to promote downsizing.
The Liberal party has suggested a $20,000 rebate for older West Australians and vowed to increase concessions for first home buyers, but the Government’s focus has been to build Perth’s way out of the housing squeeze.
Ms Saffioti said the new HEIF fund could be topped-up in future.
“It’s a good start, this will be a fund that continues to get replenished so this will be the start,” she said.
“This will help for the next two to three years, to deliver the infrastructure. So this isn’t going to the developers per se, this is funding from those utilities to help fast track homes.”