From the CEO
The Premier today handed down his first State Budget wearing the Treasurer hat with the overarching message – Westralia is the envy of the Nation. With Iron Ore royalties largely contributing to a record $5.6 billion surplus, UDIA WA are celebrating another win with the extension of the Off-the-plan duty rebate scheme for another two years from October 2021 to October 2023 albeit at 50% rather than the current 75% rebate.
This is a fantastic outcome for our members in the built form space, and great news for the community wanting greater housing choice from the benefits that apartments and strata developments bring.
WA’s domestic economy grew by 4.3% in 2020-21 – the strongest of all states and one of the top performing economies in the world. It’s unsurprising that the McGowan Government is proud of this result, with the surplus facilitating badly needed investment in health, social housing and climate action.
For property and development, we remain a cash cow with total transfer duty increasing by an estimated 57.9% (or $770 million) in 2020-21, primarily due to a strong lift in residential property transactions and a moderate pick-up in the median house price over the year. At the risk of sounding like a broken record, stamp duty reform is desperately needed but remains beyond the forward estimates horizon for now.
As in any budget, there are winners and losers. Personally, I feel blessed to live in Perth and Western Australia when so many of our eastern states counterparts are doing it tough. The challenge for the State Government is to balance the need for infrastructure investment with reducing debt.
Speaking of winners, I also feel blessed that we are able to gather together on Saturday night to celebrate the contribution our industry makes to the people of WA – restriction free. I look forward to raising a glass with our members and toasting a pretty good year thus far.
UDIA welcomes extension of Off The Plan Duty Rebate
Earlier today Premier Mark McGowan delivered his first State Budget in his dual role as Treasurer, wherein he revealed Western Australia’s economy is one of the strongest in the nation and the world with a $5.6 billion surplus recorded for 2020-21 and a $2.8 billion surplus forecast for 2021-22.
In his speech at the State Budget lockup this morning, where industry representatives from UDIA received a briefing in advance of the formal budget announcement this afternoon, the Premier focused heavily on WA’s success in keeping COVID-19 out of the state due to strict border closures and other measures.
The Premier said that his government has made a record investment in ‘WA’s future’ including a commitment to fight climate change.
Mr McGowan revealed WA’s domestic economy grew by 4.3% in 2020-21, the strongest of the States for a second year in a row. This comes after every State’s economy, except WA, contracted in 2019-20.
Treasury estimates WA’s Gross State Product (which includes net exports) grew by 3.25% in 2020-21 and is expected to accelerate in 2021-22 to 3.5% – the fastest growth since 2013‑14.
Mr McGowan said this growth is driven largely by very strong activity in housing construction and government investment, with solid contributions from household spending and business investment.
The main news out of today’s budget that is directly relevant to the development industry is the extension to the Off the Plan Duty Rebate Scheme to October 2023 albeit at a reduced rate of 50%.
An extension to the scheme was a headline recommendation in UDIA WA’s state budget submission and has been the focus of strong advocacy by industry in recent months. We certainly welcome the government’s recognition that this will assist in boosting the apartment sector in WA.
Another important aspect of the budget for our industry was the record $875 million investment to deliver more social housing properties throughout WA, which was welcomed by the social housing sector as a solid commitment to addressing social housing shortages when the Premier announced it earlier this week.
Just under two thirds of this investment ($522 million) has been allocated to deliver new social homes from 2022-23. This commitment not only provides a strong pipeline of construction activity into the future but it also promises surety that the construction of social housing will continue to be delivered over several years.
By ensuring a pipeline of construction activity over several years, the government is ensuring that industry has the opportunity to deliver on current building approvals and then has ongoing work to keep the industry moving and jobs growth sustained.
Another key announcement in the budget was the news WA would end logging of native forests from 2024, with $350 million to be invested over 10 years in new softwood plantations across the South-West, which will create and support WA forestry jobs.
This investment will provide at least an additional 33,000 hectares of softwood timber plantation. Up to 50 million pine trees will be planted, sequestering between 7.9 and 9.5 million tonnes of carbon dioxide equivalent.
The additional new pine trees will also support the State’s construction industry that depend upon the reliable supply of softwood timber.
Overall, it is a positive budget delivered by the Premier, his first time handing down a State Budget in his dual role as Treasurer. While industry would have liked to see a bigger focus on addressing the skills shortage currently impacting on the building and construction sector in the midst of record building approvals, we must congratulate the State Government once again on WA’s strong economic position and forecast.
For more information, read our Member Alert here and our media release here.
UDIA CEO to join Property Discipline Advisory Panel
This week UDIA WA CEO Tanya Steinbeck was invited to be a member on the new Property Discipline Advisory Panel in the School of Accounting, Economics and Finance at Curtin University.
The School of Accounting, Economics & Finance, along with the School of Management & Marketing comprises Curtin Business School.
Each Discipline within Curtin Business School (e.g. Accounting, Economics, Finance and Property) will have its own dedicated Advisory Panel. The Panels will play a critical role in ensuring Curtin’s curricula meet the needs of industry and students gain the requisite skills to ensure successful future careers. The Panels will facilitate a wide range of interactions between Curtin and industry, for example industry-focused research projects and student internship programs.
Tanya’s invitation to join the advisory panel provides an excellent opportunity for UDIA to have an influence on course content moving forward as we help to prepare the next generation of property industry professionals have a meaningful and engaging impact.
UDIA National TV with Jason Falinski MP
Earlier today Jason Falinski MP, Chair of the Standing Committee on Tax and Revenue featured in a special edition of UDIA National TV.
During his presentation he spoke on the importance of the upcoming Federal Inquiry into housing supply issues he is leading as it looks to examine taxes, charges and regulatory settings at local, state and federal levels. He began by showcasing the importance of this inquiry for the property and development industry by noting that Australia is one of the least densely populated jurisdictions with one of the highest weekly earnings, but some of the least affordable housing in the world.
He said home ownership is a crucial aspect of a functioning and stable democracy, however with the numbers of people under 40 being unable to afford housing, it will have a profound impact on liberal democracy into the future.
Mr Falinski said home ownership levels of people under 40 is at one of its lowest levels since the 1947 census with expectations the census data released later this year will showcase the lowest levels of home ownership for those under 40 in history.
As part of the issues around housing affordability he said that he believes negative gearing has a negative impact on housing affordability before saying that social housing, defined as those homes delivered by the Housing Commission, simply reduces supply and drives up the cost of other properties, making housing even less affordable for those looking to buy.
When challenged on the this point in the question and answer session that followed his presentation, Mr Falinski said rent assistance provided by this type of housing was nothing more than ‘rent control’ that subsequently drove up the cost of rent and therefore houses to buy.
Referencing the cost of building new homes he said local government charges drove up the cost of new builds, further reducing the affordability of housing, something the Federal Government is then required to spend extra to assist those looking to enter the market.
Following Mr Falinski’s presentation, viewers had the opportunity to ask questions direct to him, wherein he reiterated his views from the presentation as well as suggesting stamp duty should be replaced by a land tax, a change that could happen extremely quickly with the right political will.
Our thanks go to NBN Australia for sponsoring this episode of UDIA TV.
UDIA WA SPP 2.9 and Guidelines Sub-Committee
This morning UDIA WA’s Urban Water sub-committee met to discuss and provide feedback on the draft State Planning Policy 2.9 – Planning for Water and Planning for Water Guidelines (available here).
Once gazetted, the draft documents will serve to replace nine other different water-related policies and guidelines and is of importance to UDIA’s key priority to align water and land use planning to unlock development.
Submissions for SPP 2.9 close on Monday 15 November. UDIA encourages members to send any feedback through to policy@udiawa.com.au.
UDIA takes important first step in RAP
This week the UDIA WA team and key council and committee members took part in Cultural Awareness Training in an engaging and informative session delivered by Kingsley Bartlett through the Wirrpanda Foundation.
Kingsley is a Nyoongar-Yamatji man with extensive experience delivering cultural awareness training for government agencies, corporate groups and not-for-profit organisations.
During the training Kingsley took attendees on the journey through aboriginal history and culture providing a crucial background into understanding the traditional owners of the land.
UDIA has a sub committee that will be working on developing our own Reconciliation Action Plan (RAP) with the aim of producing a final plan over the next 6-12 months.
Draft Native Vegetation Policy for WA
On Tuesday the Department of Water and Environmental Regulation provided a briefing on the draft Native Vegetation Policy for WA to members of the UDIA WA’s Environment Committee.
The draft policy is a result of the previous Native vegetation in WA issues paper consultation in early 2020, the UDIA WA submission on which is available here.
Submissions are open until Monday 25 October, with further information available here. Please send any feedback to policy@udiawa.com.au.
Home in WA
It was a big and busy week for UDIA as part of our media partnership with Home in WA with the latest episode airing last Saturday, another episode set to air this coming Saturday and filming taking place on Tuesday this week for another new episode.
Last Saturday’s episode focused on tips for first home buyers with UDIA WA CEO Tanya Steinbeck and LWP Managing Director Brendan Acott interviewed for the segment on location at Ellenbrook town center.
On Tuesday, Tanya joined the Home in WA crew at OFFSITE Construction to see how quick and efficient the operation is in delivering medium density/built form product to the market.
We were delighted to be joined by OFFSITE CEO Jarrod Waring who took the time to outline their fantastic facility and the work they are doing in that space.
UDIA WA’s partnership with Home in WA has provided a wide range of great opportunities to visit our members and industry representatives ‘on the ground’ and showcase the great work they do every day.
Don’t forget to tune in to Channel 7 at the slightly earlier time of 4.30pm following Better Homes & Gardens this Saturday to catch the latest episodes.
Click here to view the latest episode and check out all previous episodes here.
Call for nominations to join the Heritage Council
The State government is seeking nominations from suitably experienced and qualified individuals to become members of the Heritage Council of Western Australia, the State’s expert body on matters concerning places of historic heritage significance.
There are four vacancies to be filled with the successful nominees commencing in January 2022.
The Heritage Act 2018 (Act) requires that Council members must possess relevant knowledge, experience, skills or qualifications to the functions of the Council, including specific skill areas relevant to your members, as set out in section 14 of the Act.
Nominations close on 24 September 2021 with further information relating to the nomination process, along with a nomination form, available here.
UDIA WA will be featuring the thoughts of Heritage Council Member Richard Offen in the upcoming edition of The Urbanist in an article looking at advantages of Adaptive Reuse.
RBA holds firm again
On Tuesday the Reserve Bank of Australia (RBA) conducted its monthly monetary policy meeting wherein the board decided to:
- maintain the cash rate target at 10 basis points and the interest rate on Exchange Settlement balances of zero per cent;
- maintain the target of 10 basis points for the April 2024 Australian Government bond; and
- purchase government securities at the rate of $4 billion a week and to continue the purchases at this rate until at least mid February 2022.
In announcing the decision RBA Governor Philip Lowe noted the momentum the Australian economy had generated prior to the Delta outbreak, with GDP increasing 0.7% in the June quarter and by nearly 10% over the year.
“Business investment was picking up and the labour market had strengthened,” Dr Lowe said. “The unemployment rate had fallen below 5 per cent and job vacancies were at a high level.
“The recovery in the Australian economy has, however, been interrupted by the Delta outbreak and the associated restrictions on activity. GDP is expected to decline materially in the September quarter and the unemployment rate will move higher over coming months.”
Despite the expected setback to the economy, Dr Lowe predicts it will only delay rather than derail the recovery with increasing vaccination rates and easing of restrictions expected to allow the economy to bounce back.
“There is, however, uncertainty about the timing and pace of this bounce-back and it is likely to be slower than that earlier in the year,” Dr Lowe said. “Much will depend on the health situation and the easing of restrictions on activity.
“In our central scenario, the economy will be growing again in the December quarter and is expected to be back around its pre-Delta path in the second half of next year.”
To read the statement in full, click here.
Great opportunity to join the team
UDIA WA are on the lookout for a new member to join the team as Member Services Officer.
The new role is responsible for providing a diverse range of administrative support services to the UDIA team and members across policy, communications and business development functions.
Key responsibilities include:
- Comprehensive administrative support to the team across all areas of the organisation
- Member relationship coordination, administration and response
- Coordination & administration of UDIA WA Committees and policy working groups.
For more information and to apply, click here.