From the CEO
Rockets & feathers.
We all know when we watch the weekly fuel price cycle or when we have bought some Aussie lamb recently that the asymmetric or ‘rockets & feathers’ pricing approach is one of the many practices impacting the cost of living. The pricing practice is when prices sky-rocket quickly but when real costs fall, pricing falls slowly like a feather. Profitable for the supplier, painful for the consumer.
Between March 2021 and September 2023, the percentage price increase that topped the charts was fuel. Seventh on the list was new dwelling purchases by owner-occupiers at 31.1%. As we will be discussing today at our first industry lunch of the year with over 400 members, there is no question that construction cost inflation has impacted the supply and pricing of housing. The remaining question is to what degree and when will costs stabilise and particularly for apartments, when will unit prices increase in unviable locations to start making a dent in our hefty supply targets?
The construction industry has escaped the wrath of Professor Allan Fels AO who released the ACTU-commissioned Price Gouging Inquiry recommendations yesterday. Unsurprisingly it was the banks, supermarkets, airlines and even childcare that have been hauled over the coals. I encourage you all to take the time to at least read the summary and the recommendations of the 80-page report.
I wrote recently about the conscious uncoupling of incomes and cost of housing. If only Australia had experienced a little more rocket to fuel wages growth it may not be the significant issue it is today. And for those in construction and development, construction cost inputs seem to be hovering in the air. The feather most definitely is not falling to the ground.
In the midst of the Federal Government’s IR laws progressing through parliament which are a real and present danger to the construction industry in particular – volatility in the sector for some time to come is all but assured.
At least we will all be able to legally ‘disconnect’ from work to destress while we wait and watch for the feathers to fall.
UDIA WA Member Update: New Clearance Process with Western Power
UDIA WA is pleased to advise that as part of our ongoing collaboration with the Premier’s and Minister for Energy’s Offices and Western Power, fast tracked pre-Design Conformance Review (DCR) clearance pathways have been introduced for eligible residential developments.
Following extensive engagement on potential solutions, two new pre-DCR Clearance pathway options for residential subdivisions have been co-designed by Western Power with input from UDIA WA.
To be eligible for the pre-DCR clearance under the first pathway, a developer must prove:
- Construction on site has commenced,
- Appropriate documentation is complete, and
- The project does not require network reinforcement.
The second pathway, which follows a successful trial, provides the ability for developers to engage a third-party auditor and submit a completed design that has passed the independent audit. These pathways will enable developers to ‘control their destiny’, providing flexibility to select the best option based on the project needs.
The new pathways will speed up clearance timeframes whilst ensuring that there are no significant delays between construction completion and subsequent energisation. To support ongoing reductions in timeframes, the new pre-DCR pathways will rely on electrical consultants participating in the audit process, and developers supporting it.
The pre-DCR clearance process will not require a security bond for eligibility.
For further information on our ongoing work with Western Power, click here for the full member alert.
Following the announcement of these new pathways UDIA WA members are invited to attend a briefing with Western Power where Zane Christmas, Executive Manager Asset Operations, will provide a comprehensive overview of these key initiatives to resolve issues relating to securing clearances and gaining energisation.
This member briefing will also provide an update on UDIA WA’s work in this area to date, and the implications of the new initiatives for industry.
Date: Monday, 19 February 2024
Time: 3:30pm to 5pm
Venue: Western Power, 363 Wellington Street, Perth 6000
This briefing is free of charge for UDIA WA members only. Spots are limited and RSVPs are essential by registering via the link here.
Please contact UDIA WA Executive Director of Strategy and Policy Sarah Macaulay with any feedback or to discuss relevant issues at policy@udiawa.com.au
Industry lunch kicks off 2024 events with a bang
Earlier today we were pleased to be joined by over 400 attendees for the first industry lunch for 2024 as we examined ‘Constructing with Confidence’ and how to build capacity in a perfect storm.
The event started with a presentation from John Bennett, Senior Leader of Construction Cost Estimation – CoreLogic using the latest Cordell Construction Cost Index (CCCI) quarterly report that show WA’s residential construction costs for a single residential home rose just 0.7% over the December 2023 quarter.
This is up 50 basis points from the 0.2% rise seen in Q3 2023, but remains 10 basis points below the national increase (0.8%) in December and 20 basis points below the average quarterly rise seen across WA in the decade to COVID (0.9%).
Despite the moderation in construction costs in WA, pricing remains generally unsettled according to Mr Bennett.
“We have seen both increases and decreases recorded across most construction related product prices,” Mr Bennett said.
“This suggests suppliers are either bringing their product pricing back down to acceptable levels from the increases during the Covid period, or they are increasing to set up for the year ahead,” Mr Bennett said.
Mr Bennett’s presentation was followed by an update from Construction Training Fund CEO Tiffany Allen who spoke to the current state of play for WA’s labour market trends and the ongoing skills shortages, while also providing some insights into what the future might hold.
Industry Leader Dale Alcock then talked about the key constraints builders in WA are facing at the moment including proposed Federal IR legislation, the potential banning of engineered stone, NCC changes and labour capacity constraints and these issues could impact on housing delivery in WA.
Following the opening comments and presentations UDIA WA President Richard Pappas joined the panel discussion in an interactive Q&A session that provided some enlightening insights as well as ideas and thoughts on what the future looks like for the WA Construction Industry.
We would like to thank all of the presenters and panel members as well as all of the attendees for making it a great way to kick off our event series for 2024.
We extend our thanks to Construction Training Fund, DevelopmentWA, Mirvac, WINconnect and Networking Partner Openlot.com.au for their support of this event.
Eligible attendees can receive 1.5 REBA CPD points. To claim these points email your license type and number to events@udiawa.com.au by 22 February.
Policy Team in Action
On Tuesday morning, the Policy Team met with the Strata Community Association (WA) to discuss the policy and advocacy work our respective organisations are undertaking, as well as our strategic priorities over the next 18 months. It was a great opportunity to better understand where our organisations can align and work together on policy matters and we look forward to continuing this relationship moving forward.
On Tuesday afternoon, a session with our Council and Committee Chairs was held to discuss UDIA WA’s priorities and asks of Government as we move toward a pivotal 2025, which will feature both a State and Federal election where housing is poised to be a key electoral issue.
Building on the work done to date with our Pre-Budget Submission, the input of our Council and Committees in representing our members will be crucial in developing our election priorities and campaign and we thank the Councillors and Chairs for their time and input into helping us craft an effective set of priorities for Government.
On Wednesday afternoon, UDIA WA CEO and Executive Director met with Daniel Lines, Principal Policy Advisory – Treasury in Deputy Premier Saffioti’s office to discuss our State Budget asks. We provided a briefing to contextualise our requests and delve into the detail. We thank the Government for the ongoing engagement with UDIA whilst the 2024-25 State Budget is prepared and look forward to continuing to work together to ensure housing supply is prioritised at this critical time.
New State Government Architect announced
Yesterday the State Government announced Emma Williamson would be taking on the role of Government Architect following Rebecca Moore’s decision to step down from the role after three years of service.
Ms Williamson is the co-founder and Partner at TheFulcrum.Agency, with nearly 30 years of architectural experience. She was named a Fellow of the Australian Institute of Architects in 2022, and has worked on projects including the WA Museum Boola Bardip, Murdoch University’s Boola Katitjin, and the Karratha Super clinic.
Ms Williamson holds degrees in Architecture and Interior Design, and is a member of the Western Australian and South Australian State Design Review Panels, as well as the Chair of several local government Design Review Panels.
As Government Architect and therefore Chair of the State Design Review Panel, Ms Williamson will provide design leadership and strategic advice to enhance the quality of our built environment, as well as ensure that good design is at the centre of all development and major projects. The role also provides expert and independent advice to the Minister for Planning, and the Premier on key projects along with strategic planning initiatives.
Ms Williamson will feature at our State Conference next month alongside WAPC Chair David Caddy and DPLH Director General Anthony Kannis in a session that will explore WA’s newly activated development approval processes as key planning reform initiatives begin to take effect.
It will feature a particular focus on the permanent Significant Development pathway, Part 11, the streamlined DAPs – both of which open to applications on March 1 – and Design Review under Ms Williamson as the new Government Architect. Following the presentations, the speakers will be joined by Ryan Keys, Executive Director DAPS (DPLH), for an open forum Q&A discussion.
To make sure you are part of this event, register here. To view the program for this year’s State Conference, click here.
Register before 29 Feb to receive 15% discount
UDIA WA are pleased to share that anybody who registers for our 6-day Foundations of Property Development course by Feb 29 will receive a 15% discount.
The purpose of this 6 day course is to introduce participants to the various areas of knowledge required to operate effectively in Western Australia’s urban development industry. It is designed to give an end-to-end overview of the property development process, and is taught by reputable local experts in the industry who have a wealth of first hand knowledge and experience.
The program is delivered over six weeks twice a year (April and October) with participants able to enrol for single one day modules, or for the full program.
To register for this course and for more information, click here.
UDIA National Congress 2024 – View our Congress Program now
UDIA National are excited to announce the details of newly confirmed speakers and sessions for Congress 2024.
Offering a diverse range of topics, Congress 2024 will give you in-depth industry insights and the opportunity to learn from those that are leading the way in the Property Development Industry.
From the Opening Night Welcome Party brought to you by Oliver Hume to insights from Luci Ellis, Jennifer Keesmaat, Nathan Dal Bon and Kate Meyrick plus the Study Tours and the official launch of the 2024 State of the Land there is plenty to inspire and engage delegates throughout the Congress.
To view the full program, click here and to register, click here.
RBA holds rates at first meeting
The first Monetary Policy Meeting for 2024 took place on Tuesday and saw the Reserve Bank Board opting to keep the official cash rate at 4.35%.
The decision was expected by many economic experts following the lower than expected inflation data released last week. While inflation has reduced, it is still above the 2-3% range the RBA recommends is a sustainable level for the economy.
In a statement released by the Reserve Bank Board following the decision they highlighted that while there are encouraging signs, the economic outlook is uncertain and the Board remains highly attentive to inflation risks.
“The central forecasts are for inflation to return to the target range of 2–3% in 2025, and to the midpoint in 2026,” the statement said.
“Returning inflation to target within a reasonable timeframe remains the Board’s highest priority. This is consistent with the RBA’s mandate for price stability and full employment. The Board needs to be confident that inflation is moving sustainably towards the target range. To date, medium-term inflation expectations have been consistent with the inflation target and it is important that this remains the case.
“The path of interest rates that will best ensure that inflation returns to target in a reasonable timeframe will depend upon the data and the evolving assessment of risks, and a further increase in interest rates cannot be ruled out.”
Apply to join the Aboriginal Advisory Council of Western Australia
Expressions of Interest are currently open for membership to the Aboriginal Advisory Council of Western Australia (The Council).
Established under Section 18 of the Aboriginal Affairs Planning Authority Act 1972, the Council is a Government board providing advice to the Minister for Aboriginal Affairs and the State Government on matters relating to the interests and well-being of Aboriginal people across Western Australia.
The Council lead the way in decision-making and dialogue regarding issues affecting the recognition and rights, leadership and vision, expertise, well-being, and integrity of Aboriginal communities.
The Council is also the WA Government’s key strategic partner in the National Agreement on Closing the Gap, providing advice and guidance on the State’s implementation.
The Council meets approximately six times per year in Perth, providing advice on a range of policy matters to Government agencies and at times Ministers.
The current membership is made up of Western Australian Aboriginal leaders, reflecting a diversity of genders, regional experience, and professional backgrounds.
Application packages are available on the Department of the Premier and Cabinet’s website or by contacting the Secretariat either by emailing AACWA@dpc.wa.gov.au or by phoning (08) 6552 5000.
Applications close at 8:00pm on 18 March 2024.
2024 Partnership Opportunities
As we kick start the new year, maximise your organisation’s brand exposure across key industry sectors by taking advantage of the various sponsorship and advertising opportunities available with UDIA WA.
Sponsors and advertisers gain extensive exposure alongside UDIA WA’s prominent and well received events and publications. Our team will work with you to curate the best possible package to meet your needs. From a one-off advertisement to annual sponsorship, find something that suits your budget and strategic objectives with UDIA WA.
For information about how you can align your business with UDIA WA through a range of opportunities, click here for our advertising opportunities and here for our full sponsorship prospectus.
Refer a new member and save!
UDIA WA are providing an opportunity for our members to receive 25% off the cost of a table booking to an Industry Lunch or Breakfast.
The discount is available to members that refer a new company to become a member with UDIA WA, however the discount is only available if the referred company joins by 29 February 2024.
The 25% discount is applicable to a table booking for a UDIA WA Industry Lunch or Breakfast until 30 June 2024.
New members that join before 29 February 2024 will have the joining fee waived.
For more information, contact membership@udiawa.com.au