UDIA In Action
This week UDIA called for a short, sharp incentive for investors to purchase newly built apartments. The call came on the morning of our first industry breakfast for 2021 focused on addressing the rental crisis. With approximately 1600 completed apartments available now, we see this incentive as a direct avenue to ease the supply shortage of rental accommodation in the immediate term.
The event was a great way to kick off our 2021 breakfast series, with speakers Nathan Blackburne, Damian Collins, Prof Steven Rowley and Sue Pember outlining their views on attracting investment back into the local market.
To celebrate International Women’s Day and the theme #choosetochallenge, UDIA WA CEO Tanya Steinbeck participated in a panel discussion today for the Australasian Housing Institute where she shared her insights on the topic of Challenging the Leadership Gap.
Yesterday our Director Policy and Research Chris Green was a keynote presenter at the Strata Community Association of WA annual market event, outlining the current state of the WA housing market. Chris discussed the importance of sustainable population growth and WA’s continued economic recovery before providing some predictions on what the next year might hold.
This afternoon UDIA engaged in the DPLH’s Medium Density Advisory Group Meeting discussing stakeholder feedback on the draft code and yesterday attended Urbis’s SPP7.2 Precinct Design Briefing discussing the implementation of the new policy.
Finally, this week we also released the 2020 Awards for Excellence special edition of our magazine, The Urbanist. We are looking forward to seeing many of you at our first luncheon for 2021 on 26th March!
Call for investor incentive
UDIA WA has made a call for the state government to incentivise investment in completed apartments to boost housing stock to immediately help address WA’s rental crisis.
Private industry and private investment provide a significant proportion of rental properties to the market each year and without that investment, we are now experiencing a rental vacancy rate that is sub 1%.
In full support and alignment with the State Government’s Housing Strategy 2020-2030, UDIA WA is proposing that the state government provide a short, sharp, targeted incentive to investors who purchase completed apartments on the condition they are immediately offered to the private rental market.
There are currently over 1,600 completed new apartments available for sale throughout the Perth metropolitan area (according to Urbis Apartment Essentials data which records apartments in buildings of 25 apartments or more), with the majority of stock in suburbs where there is a critical rental shortage.
The average sale price of the completed apartments represents on average 73% of the median house price within their respective suburb, highlighting the relative affordability of the properties. The newly completed apartments are ideally suited for rental, with a diverse range of 1, 2 and 3 bedroom options available in a variety of suburbs close to infrastructure and employment.
We believe that by offering a short, sharp stamp duty rebate in line with the current off-the-plan rebate scheme to qualified investors with tenancy agreements in place, this is the shot in the arm that investors need who have been sitting on the sidelines waiting for the right opportunity.
Property investor finance has fallen 75% over the past 5 years from an average monthly loan commitment of $889m in 2014/15, to just $218m in the 2019/20 financial year.
Already the property industry is reporting 10 – 20% increases on newly leased properties, prior to the lifting of the moratorium on rental increases on the 29th March 2021.
Incentivising private Investors now to purchase a newly built apartment will bring instant supply into the market and assist to contain the price rises.
Stimulus measures to date, which have been very welcome, have focused on the new land market and have been extremely successful in keeping the residential property market in a growth trajectory and securing employment in that sector.
Now is the time to harness WA’s reputation as a safe and stable place to live, work and invest and look at how we can harness WA’s fantastic response to COVID-19 and the strong position we find ourselves in to attract more people to the state.
You can read more detail in our Fixing the Rental Crisis policy document here.
Premier responds to UDIA’s election campaign platform
Premier Mark McGowan has written to UDIA WA CEO Tanya Steinbeck this week in official response to our #LiveWorkInvestWA state election campaign that outlines our key recommendations for all political parties and candidates in the lead up to the election on Saturday.
The Premier acknowledged our industry’s importance to economic growth and the willingness to cooperate throughout the response to COVID-19.
The letter addresses several of UDIA’s recommendations, outlining the government’s actions to date including infrastructure investment, economic and planning reform and streamlining environmental approvals.
While we appreciate the work the government has undertaken to date, and respect the outstanding management of the COVID-19 risk to our state, UDIA is keen to work with the government post-election on furthering our specific recommendations in relation to economy, liveability and environment.
Watch the video outlining our state election platform here.
Our key policy platform for the year ahead is all about ensuring the industry can continue to grow and play an integral role in the state’s economic recovery.
You can read our priorities for 2021 here.
Rental Crisis Breakfast
With the rental vacancy rate down to 0.8% and an increasing median rent, Perth’s rental crisis is looming large and UDIA’s first breakfast event for 2021 was focused on how to attract greater investment into the market to ease supply shortages.
Cedar Woods Managing Director Nathan Blackburne said that there has been very little supply delivered to the market in the last six years and that has now caught up with us. He did advise that enquiries form investors in the past 2 months has exceeded the previous six months and he believes investors will underpin demand for property over the medium term.
Damien Collins from Momentum Wealth agreed that investor appetite is growing in the Perth market, however it was critical that the government incentivise investment including the end to the rental moratorium, changes to stamp duty and addressing lessors rights.
Professor Rowley outlined growing affordability issues after four years of static rents and a lack of social housing in WA as major issues. He also outlined the importance of quality affordably housing, stating that people were more satisfied when residing in quality accommodation.
Director of Mi Casa Property and Aussie OS Global Mobility Services Sue Pember rounded out the discussion providing an ‘on the ground’ perspective on what is happening in the market. Sue said that the market required more options such as dual key living and programs to facilitate more house share and flat mate arrangements to address supply issues.
Overall, the panellists agreed that the lifting of the moratorium at the end of March would be a big incentive for investment in the Perth market and it was important to encourage investment to boost stock.
See images from the event here.
#HerCity
The UN Habitat and Global Utmaning have launched a joint initiative that supports urban development from a girl’s perspective. ‘Her City’ guides urban actors to implement projects through a step-by-step methodology providing an open and digitally accessible platform for all.
Her City supports cities to scale up and mainstream girls’ participation in planning as a part of their long-term strategies to build sustainable cities and societies.
According to the Her City creators, involving girls in urban development will make the city better for everyone. Girls plan and design with diversity and different needs in mind. Participatory processes are key for planning a city that works for everyone. If we let citizens that are rarely heard be the experts, our cities and communities will become more inclusive, equal and sustainable.
More here
Special Awards edition of The Urbanist
Yesterday, UDIA WA launched the 2020 Awards for Excellence special edition of The Urbanist. The edition highlights the winners and finalists from our awards program and also provides insight from the judges on what they look for each year and their top tips for entrants.
We also sat down with our two individual winners Tamara Smith (Women in Leadership) and Fenualla O’Brien (Young Development Professional) to discuss their plans for 2021.
Key local contributors to this edition include:
- Cameron Shephard
- Gavin Hegney
- Danielle Davison
- Tamara Smith
- Fenualla O’Brien
You can read the edition in full here.
We hope you enjoy reading this edition and we would like to extend our congratulations to all of the winners and finalists this year.
Latest Market Statistics released
The latest edition of UDIA WA’s Urban Intelligence report was released on Tuesday providing a comprehensive overview of the stats and facts that matter to the development industry.
This month’s edition features an article from UDIA WA Director Policy and Research Chris Green that provides an overview of our 2021 Policy Priorities as well as looking at the link between mineral exploration expenditure, population growth and lot sales.
UDIA members can download the full report here.
BGC Exec wins 40under40 award
UDIA WA congratulates Executive Manager at BGC Housing Group Michael Bartier on being recognised at the prestigious WA Business News 40 Under 40 Awards.
RBA Governor speaks on Australian recovery
Earlier this week, RBA Governor Philip Lowe provided a speech to the AFR Business Summit wherein he detailed Australia’s current economic position and reiterated his assertion the official cash rate will not be raised until 2024 at the earliest.
He started by detailing Australia’s continued strong recovery from the pandemic by highlighting that GDP increased by 3.1% in the December quarter, following a similar rise in the previous quarter. He said these back-to-back large increases are materially better outcomes than was expected in August and they reflect the success that Australia has had on the health front, the very large fiscal and monetary policy support, and the flexibility of Australians in getting on with their lives and businesses.
“As a result, we are now within striking distance of recovering the pre-pandemic level of output,” Dr Lowe said.
Dr Lowe also pointed to Australia’s sharp employment returns as further indication of a stronger than expected economy, however he made it very clear they do not negate the fact that there is still a long way to go and that the Australian economy is operating well short of full capacity.
One area of Australia’s economy that Dr Lowe is keen to see improve is private business investment. He highlighted that there has been a strong recovery in consumption since the start of the pandemic but non-mining investment has not rebounded as strongly.
“While there was a welcome pick-up in the December quarter, particularly in machinery and equipment investment, investment is still 7% below the level a year earlier and over 10% below where we thought it would be at the start of last year,” Dr Lowe said.
“The full recovery of our economy requires a further lift in business investment. Stronger investment will also boost our productivity and provide a firm basis for stronger growth in nominal and real wages. Globally, higher levels of investment relative to savings are also one of the keys to a return to more normal levels of interest rates over the medium term.
“The Australian economy is recovering from the pandemic and we expect this recovery to continue. We are also expecting further progress towards the RBA’s goals, although the journey back to full employment and inflation consistent with the target is likely to be a long one. The RBA will maintain supportive monetary settings for as long as is required to achieve these goals.”
To read the speech in full, click here.
Albanese talks cities
Leader of the federal opposition Anthony Albanese addressed the Australian Financial Review’s Business Summit yesterday, talking about the future of our cities.
Mr Albanese said that cities policy is a passion of his, calling for a smart cities policy to harness the benefits that our urban communities can bring while avoiding the drawbacks of poorly functioning cities including overcrowding, congestion, pollution, crime, poverty, and disadvantage.
According to Mr Albanese, Labor will implement six measures in their cities policy including:
- Transform City Deals into genuine City Partnerships;
- Revitalise our CBD’s;
- Renew the independent role of Infrastructure Australia in urban planning;
- Deliver a new National Urban Policy framework;
- Publish an annual State of the Cities Report; and
- Give local government a voice in a meaningful National Cabinet process.
You can read the full speech here
Social housing enterprise launched
According to Foundation Housing, their Australian-first affordable housing program Elevate, has already been a resounding success.
Elevate uses a unique funding model to create good community outcomes, supports the local property industry and is looking to change perceptions around the quality of affordable housing by purchasing homes in higher-end developments.
The initiative has been developed without any subsidy. Using low-cost finance offered by National Housing Finance and Investment Corporation (NHFIC), Foundation Housing purchased just over 100 apartments from a number of different WA developers.
Foundation Housing CEO Chris Smith said the Elevate Program had very much been a collaboration with the property developers, around 10 in total, including Fini, Stirling Capital, Pindan, Norup Wilson and Parcel.
The concept received significant input and support from Foundation Housing’s Development Committee members, all experienced property professionals in their own right and bring a commercial perspective to the work of a not for profit.
Mr Smith says Darren Cooper, Peter Lee, Justine Roberts and Michael Glendinning should be credited in bringing new ideas to grow housing supply in WA.
The timing for launching the program has coincided with the rental crisis, meaning interest in the homes has far outstripped supply.
The new Elevate homes are located in inner suburbs including Perth, Subiaco, Duncraig, Cannington, Innaloo, Joondalup and Como.
Find out more here