In 2020, governments around Australia acted quickly to stimulate the economy in the face of COVID.
There was genuine fear of the unknown.
How damaging would the disease be? How long would lockdowns last and how bad would the corresponding economic downturn be?
The response was focused on saving jobs and providing confidence to industry and was unlike anything we have seen before or will again.
Billions went towards programs such as JobKeeper, while new homebuilders had a suite of extra grant funding sources made available to them by both State and Federal governments. In terms of approval processes, State governments and local councils across the country streamlined approvals for developments and introduced new pathways for shovel-ready projects.
There was a realisation that our economy was facing potentially its greatest ever threat.
Fast forward to 2023 and the real impacts of the pandemic response are now set in, long after the sugar hit has worn off.
They are more acute when you look at how the development industry is struggling through myriad issues while the country needs more affordable housing more than ever.
Land developers are facing unprecedented market pressure, persistently high construction costs and increasingly complex regulatory frameworks imposed by government.
While we can’t do anything about macroeconomic conditions or construction costs, both State and local governments can assist in reducing the price of housing by cutting fees and charges.
Governments should also be encouraged to revisit the complexities of their approval processes and ask themselves if arbitrary requirements placed on industry are really necessary. They add costs and time for final approval for the homebuyer, so are they worth it?
These are the tough questions we need to be asking together as industry works as quickly as possible to build more homes for West Australians.
Minor amendments to current and draft regulations could reduce the cost of a new home by up to $30,000.
These cost reductions could potentially come in the form of removing building requirements for temporary bushfire protection in estates which abut land already approved for immediate development. Why do you need to protect against a bushfire from land which is going to be converted into housing?
We can also easily see a reduction in charges for long term community infrastructure upgrades. This is a fee applied to each block of land which is saved to pay for asset upgrades a decade, or in some cases many decades, into the future. This regional infrastructure was historically provided by government. Why is it appropriate for first homebuyers to pay for this infrastructure where residents in older suburbs did not?
Overall, we desperately need a reduction in overall approval timeframes across government to reduce the impacts of inflation and to shorten the time it takes for people to move into their new home. This will have an immediate impact on the cost of housing, and it removes unnecessary intervention by regulators to address problems which don’t exist.
Recent introduction of medium density codes and WA’s Aboriginal Cultural Heritage Act add cost and complexity to an already strained construction sector.
If action is not taken, buyers lose out. The same buyers who have saved up for a deposit but have just seen 12 interest rate rises since May 2022.
WA urgently needs the same sharp focus we had in 2020 to address fundamental issues impacting the housing industry.
The only way to deliver affordable housing across the state is by government and industry working together.