From the CEO
An investment in knowledge pays the best interest. Never a truer word spoken by Benjamin Franklin on a number of fronts.
First, you are likely to get a far better return on your investment in your education than you will from any of the four major banks – whom unsurprisingly raised rates in the response to the RBA decision on Tuesday faster than Usain Bolt. They are yet to raise any of their deposit rates and I most certainly won’t be holding my breath waiting.
Second, investing more time and resources in monitoring and translating financial and housing market drivers, dynamics and the implications for your customers and as a result your organisations is what we are doubling-down on here at UDIA as we start to see the real impact of interest rates start to bite across the country.
We have now officially surpassed APRA’s 3.0% mortgage serviceability buffer. The RBA has also made it very clear they are not done yet with further rate rises expected, piling further pressure on mortgage holders serviceability as cost of living rises yet to be curtailed. Housing debt is at record highs. So what does that mean for us here in Westralia?
Whilst we are in a fortunate position in terms of relative home ownership affordability at present, continued pressure on rents is inevitable. We are now at a median rent of $545 and a vacancy rate of 0.6%. Migration is ramping up, unemployment is at record lows and we only have around 7,000 established properties on the market where we would normally need 12,000. Forecast dwelling completions as a result of the stimulus won’t really shift the dial on supply for us. So what will?
The UDIA brains trust is busy finalising our Policy Priorities for 2023 which are centred around answering this very question. We are focused on solutions that will return a decent dividend to not only our members but the broader community. Stay tuned.
World class speakers added to National Congress lineup
UDIA WA are delighted to share a host of incredible speakers have been added to the UDIA National Congress lineup including Adrian Harrington, Nicole Lockwood and former AFR Property Editor Robert Harley as the Congress MC.
UDIA National Congress provides a platform to learn from expert speakers focused on the urban development industry in Australia, international case studies and what’s next for the industry in terms of innovation and market demand as well as the ultimate opportunity to network with high-profile delegates from across Australia!
We are delighted to announce the following new high-profile speakers have been added to the program:
- Adrian Harrington, NHFIC (The National Housing Finance and Investment Corporation)
- Andrew Miller, Hatch Canada
- Nicole Lockwood, Infrastructure WA
- Dr Sam Tsemberis, PhD, Pathways to Housing USA and Founder of the Housing First Movement
- Richard Evans, Talent Nation
- Emeritus Professor Colleen Hayward to conduct the Welcome to Country
- And the Congress MC this year, Former The Australian Financial Review Property Editor Robert Harley!
To view the program in full, click here.
Being held in Perth, this is THE time to get amongst the best and brightest from across the country. Click here for more information and to register but hurry Early Bird rates end soon!
Our thanks go to the 2023 National Congress Presenting Partner nbn® Australia for their support.
Breakfast highlights need for Workforce Attraction Strategy
UDIA WA’s first industry breakfast for 2023 was a fantastic way to start the year, with national immigration expert Dr Abul Rizvi providing a clear, concise breakdown of Australia and Western Australia’s immigration data and what it means for our construction workforce to our audience.
Dr Rizvi has a fantastic knack of breaking down a complex system and data into a clear picture of where we are at and what can be done to improve WA’s share of skilled workers coming to the state to live and work.
In brief, Dr Rizvi outlined how significantly WA’s total share of the national migration program has declined over the last decade and in particular, the WA portion of students and skilled temporary workers. Drilling down even further to the construction related occupations and WA has faired even worse, with skilled temporary entrants in WA construction occupations falling from around 24,000 in 2013 to around 6,000 in early 2021/22.
While Dr Rizvi said that temporary entrants living in Australia had increased by over 72,000 overall, which is record numbers, the problem is that these numbers are primarily driven by an excess of visitor arrivals and less departures, rather than skilled workers. Which means we have not been overly targeted in our intake in order to fill specific skills gaps.
In the context of an ageing population on a global scale, Dr Rizvi warns that competition for skilled migrants will become more intense in future years and WA needs to address issues with our immigration policy now, to ensure we can realistically compete for our share of skilled migration. This is important because while skilling up our young people and encouraging West Australians to work in the construction industry, we still need immigration to adequately fill our labour force.
Based on Dr Rizvi’s advice, UDIA WA is calling for a Construction Workforce Attraction Strategy in WA due to critical construction and development skills shortages that are restricting the industry’s capacity to meet housing demand. In our recent State Budget submission, UDIA WA called on government for a Construction Workforce Attraction Strategy for Perth and the regions, and the negotiation of a Skills and Labour Agreement for the construction industry. UDIA WA is very keen to work with other industry bodies and the State Government to negotiate a labour agreement for high quality WA construction industry employees.
Hesperia Managing Director Ben Lisle followed Dr Rizvi’s presentation with a concise rundown of how current migration policy is impacting on housing supply. Mr Lisle outlined the uniquely cyclical nature of the WA economy, which is so reliant on the mining sector and how that impacts on housing approvals. Mr Lisle said that WA is facing a major housing shortage, with a potential shortfall of up to 80,000 homes by 2027. Some of Mr Lisle’s recommendations for attracting more people to WA include more targeted approaches including streamlining visa processing and assisting in the provision of housing for workers.
The panel session following the keynote presentations, was facilitated by Construction Training Fund (CTF) CEO Tiffany Allen and included Director General of the Department of Training and Workforce Development Karen Ho, along with Dr Rizvi and Mr Lisle. All three agreed that more targeted, streamlined systems to attract the right skills to WA is needed for the long term.
Thanks to our presenters and valued sponsors DevelopmentWA, Harley Dykstra and CTF for supporting this event.
UDIA WA assesses development ready pipeline
Last Thursday UDIA WA hosted our inaugural Development Ready Pipeline (DRP) Forum at The Vines in the Swan Valley, with over 80 representatives from across industry, government and service infrastructure provision agencies.
The overarching objective of the DRP project is to provide an objective and robust assessment of the state of play of land availability and land readiness for residential development.
The DRP Forum focused on Perth’s North East Sub-Region and was designed to present preliminary results and analysis undertaken to date of the DRP project, as well as collate insights on development, planning and servicing challenges across the North-East which will impact on the ability to deliver new dwellings in a timely and efficient manner.
A summary report outlining the DRP Project’s Pilot works to date and forward mobilisation plan will be launched at our upcoming Industry Luncheon on February 17.
Registration for this lunch closes tomorrow, Friday 10 February so register here now to secure your spot.
State Government responds to State Infrastructure Strategy
At the end of last week UDIA WA welcomed the State Government’s response to Infrastructure WA’s State Infrastructure Strategy that provides clarity to industry around the government’s commitments to deliver a more diversified economy and prosperous society.
The response highlights that many of the recommendations are supported in full or partially align with initiatives government is already progressing.
When it comes to planning and coordination, most recommendations are either only partially supported or not supported, with a reliance on Perth and Peel @ 3.5M, METRONET and DesignWA as providing the answers to the challenges in this space.
The State Government is not supporting the recommended urban consolidation action program despite the ongoing barriers to delivering infill.
The establishment of a prioritisation framework for state priority areas, and its endorsement across government has also not been supported.
Pleasingly the housing recommendations are fully supported and align with the government’s current progress in this space. The State’s Housing Strategy is acknowledged as the key guiding document, noting the review of actions, targets, mechanisms, policies, and investment programs to ensure it remains efficient and effective, which is welcomed and we look forward to engaging with government on this.
Whilst there is much detail to unpack, we look forward to IWA, Government and Industry working together to ensure the development of a robust State Infrastructure Program, identifying strategic projects, to provide greater certainty for industry and to improve WA’s share of Federal infrastructure spending.
Click here to read the State Government’s response and here to find out more about IWA and the State Infrastructure Strategy through our article in the recent edition of The Urbanist.
UDIA National welcomes Housing Affordability Future Fund
UDIA National welcomes the Government’s introduction of the Housing Affordability Future Fund (HAFF) and National Housing Supply and Affordability Council Bills into Parliament, as the first important steps towards combatting the chronic shortage of Affordable Housing in Australia
“The provision of safe and adequate housing is a whole of community issue. UDIA National recognises the HAFF as a golden opportunity for government, community housing and private at market/affordable providers to pull together to start solving the deep shortages in affordable and social housing,” said Max Shifman, President, UDIA National.
The decades long decline in new housing supply is a result of a lack of development ready land due to a lack of enabling infrastructure, increasing cost imposts and inefficient planning processes. In addition up to 60% of zoned housing land is prevented from being built on some areas because of straightforward issues. The result is that it can take 6 years or more to finish building a new house because of planning and approvals.
“These delays have pushed housing affordability into crisis and created chronic shortages across the entire housing spectrum. We now face the stark reality that Australia needs 45,000 new affordable and social housing each year just to keep pace, yet we are only managing around 8,500 dwellings through government and Community Housing Providers,” said Mr Shifman.
It is crucial that we start making inroads now given the ever-tightening supply market – even reducing the approval times for housing will release significantly more development ready land for affordable, social and at-market housing,” he added.
The Federal Government’s new National Housing Supply and Affordability Council Bill is a positive initiative that will go a long way towards identifying and tackling crucial supply blockages that hold back housing.
“It is the right time for bold initiatives that will bring all property providers together and bolster land supply to resolve the affordable and social housing shortages. Once passed, the real work starts on formulating the detailed operation of the HAFF and industry welcomes the opportunity to work with the political leadership to bolster housing supply and affordability across the spectrum,” said Maxwell Shifman.
Policy Team In Action
It has been another busy week of Standing Advisory Group and Strategic Committee meetings, with the Industry Workforce and Infrastructure SAGs continuing to review the 2023 Policy Priorities and relevant actions.
The Liveability Committee welcomed the WAPC Chairman David Caddy and Senior Representatives of DPLH to run through the review of the WAPC and other Phase 2 Planning Reform Priorities.
Our Diversity Committee also met on Monday to run through strategic priorities for the year ahead and have identified a range of ways that UDIA can continue to promote our Diversity and Inclusion Toolkit to members and also provide further education opportunities in relation to a range of areas relevant to diversity and inclusion to assist members. The Community Education & Engagement advisory group also met on Thursday afternoon.
The Economic and Environment Strategic Committees finished the week off discussing opportunities for UDIA WA to progress policy priorities around a collaborative regulatory environment, infrastructure coordination and the potential alternative to the SAPPR.
RBA raises rates… again
As expected, the Reserve Bank of Australia increased the official cash rate target by a further 0.25% following the recent continued increase to inflation.
The increase takes the official cash rate target to 3.35% as the RBA continues to fight against the rising inflation rates.
In announcing the decision RBA Governor Philip Lowe made reference to further increases being needed over the months ahead to ensure that inflation returns to target and that this period of high inflation is only temporary.
Aiding the temporary mindset the RBA is proffering that wages growth in Australia is relatively low, especially when compared to other international markets such as the UK and the US where wage growth has topped over 6% to create a wage/price increase spiral.
With the 3.1% wage growth in Australia much lower than the inflationary figures, the expectation is that inflation will settle down later this year, however the RBA’s statement suggested the economy will struggle once the increases end.
The RBA says it expects GDP growth to slow to only 1.5% during 2023 and 2024, which is lower than the International Monetary Fund’s growth forecast, which has economic growth of just 1.6% this year, climbing to 2.2% by 2026.
For more information, click here.
Check out our new and improved Member Experience
UDIA WA recently released details of our new and improved Member Portal on our website including access to our Member Directory and we encourage you log in to access all the exclusive member information we have available if you have not done so yet.
UDIA WA’s new and improved Member Portal is now LIVE and available to ALL individuals who are an employee of a UDIA WA member organisation!
Simply click this link to access your login details.
The UDIA WA ‘member only’ section provides our members with exclusive access to the following content:
- Our new and improved Members Directory, which includes contact details for all of our current members
- Every edition of our thought-leadership magazine The Urbanist
- Every edition of monthly data publication Urban Intelligence
- Every edition of quarterly property market publication the Urban Development Index
- Our Diversity Toolkit – designed to guide members through developing a Diversity & Inclusion policy
- Our weekly Land Snapshot of land sales across Perth
- And much more!
The new UDIA WA member portal has been developed based on feedback from members and to ensure an enhanced member experience.
To access the new member portal, click here or contact udia@udiawa.com.au if you experience any issues.
Consultations on reforms under the EPBC Act
UDIA WA is encouraging members who will be impacted by the cost recovery for environmental assessments under the EPBC Act to complete the consultation survey before it closes on 13 February.
As part of the cost recovery for environmental assessments under the EPBC Act the Department of Climate Change, Energy, the Environment and Water is looking to revise the charges currently applied and is considering full cost recovery. The current charges were last revised in 2016 and are set out in the Cost Recovery Implementation Statement.
A 100% cost recovery model is currently being proposed, which would result in a fee increase likely in the region of 7 to 10 x the current amount. While some exemptions are being considered, the resulting increase could affect many projects.
For more information and to provide your feedback, click here.
Certificate IV Course – Enrolments for February 2023 Intake Now Open
Enrolments for our next intake of the BSB40920 Certificate IV in Project Management Practice, Specialising in Property Development course are now open.
BSB40920 Certificate IV in Project Management Practice, Specialising in Property Development is the only nationally-recognised qualification of its kind that teaches the project management competencies unique to the property development industry.
The course has been written by UDIA NSW in partnership with its members and vocational education experts. The course teaches the critical skills of project management such as identifying project scope, managing time, cost and quality, contract negotiation, team engagement and stakeholder communication.
The qualification is delivered over 18 weeks through a blended method of online self-directed learning and regular tutorials. Upon achieving a competent result for all course units of competency, graduates will attain a BSB40920 Certificate IV in Project Management Practice, Specialising in Property Development issued by our RTO, McMillan.
For more information and to register your place, click here.