Industry Issues 18-05-23

From the CEO

Remember that time is money.

That’s one of the key messages I gave to third year property students at Curtin University this morning when summarising some of the challenges developers face in delivering feasible projects, especially in this current environment.

Whether its through lengthy & costly approvals, holding costs, construction cost escalations or missing the sweet spot in the market cycle – the longer things take the more costly they become. Much of that cost is ultimately worn by the purchaser, impacting housing affordability.

When Benjamin Franklin wrote his “Advice to a Young Tradesman” in 1748, he couldn’t have conceived the longevity that his well-articulated wisdom would have for centuries to come.

“In short, the way to wealth, if you desire it, is as plain as the way to market. It depends chiefly on two words, industry and frugality; i.e. Waste neither time nor money, but make the best use of both.”  Indeed.

In capturing Franklin’s hints and transferring his knowledge from ‘an old tradesman’ to a young one, his advice has proven to withstand the test of time and provide ethical goalposts for generations on how one can be both financially successful and a good person.

It is in this spirit that I am so looking forward to our special 50th anniversary conference in Bunker Bay. Reflecting on the last 50 years of UDIA and the development industry and hearing about the lessons learnt, legacies left and hopes for the future from our oldest members (not necessarily in age…) & supporters. Then casting our minds to the next 50 years and the opportunities for UDIA WA, our industry and more broadly our community.

In the meantime, I am curious – What advice would you give a young developer today?

New Legislation welcomed to support Build-To-Rent in WA

Following recommendations by UDIA WA, the State Government introduced legislation this week that will provide a land tax exemption for eligible build-to-rent developments.

The Land Tax Assessment Amendment (Build-to-Rent) Bill 2023 provides a 50 per cent land tax exemption for up to 20 years for eligible build-to-rent developments.

A build-to-rent development is a housing development constructed for the purpose of providing multiple residential dwellings for lease under residential tenancy agreements.

To qualify for the exemption, available from the 2023-24 assessment year, a development must:

  • contain at least 40 self-contained dwellings available for residential leases;
  • be owned by the same owner or group of owners, and be managed by the same management entity; and
  • be completed between 12 May 2022 and 1 July 2032.

Retrospective land tax would apply if an eligible build-to-rent development stops meeting the criteria within the first 15 years after the exemption is granted.

UDIA WA has been working with government for several years now to identify opportunities to facilitate more affordable housing stock being delivered ‘on the ground’ and build-to-rent has been a significant focus.

The Federal Government announced measures in the recent Federal Budget papers to reduce Managed Investment Trust (MIT) withholding tax for BTR from 30% to 15% after 1 July 2024.

That decision aligns with UDIA’s calls to create a level investment playing field, by lowering the rate to attract at-scale international investors familiar with funding large investments in housing.

For more information, read our media release, here.

Western Power workshop

Since late last year, UDIA WA has been actively working with Western Power to resolve challenges for our industry in ensuring safe, reliable, and timely power supply for the delivery of crucial housing supply.

This has included engagement at Executive level and through our Infrastructure Standing Advisory Group on quick wins (such as the re-establishment of the land development team, allocation of additional resourcing and workflow management improvements like prioritisation based on practical completion date) and a detailed land development process review to identify opportunities to improve service timeframes and the overall customer experience.

This week, we were pleased to support Western Power’s stakeholder workshop to discuss the review findings and participate with our members and industry representatives in further co-design of potential solutions and strategies to address key pain points (around the themes of People, Process, Technology and Data).

The focus of the co-design element of the workshop was on three key opportunities:

  • Collaborating to develop concept plans for early strategic network planning to inform and reduce timeframes for Design Information Package (DIP) at each stage of a land development project.
  • An audit/compliance framework based on design and construction quality to enable early clearances.
  • Clarity on roles, responsibilities, and accountabilities.

Western Power will explore the feedback from the workshop, including additional quick wins to deliver further improvements within the next six months, and aim to complete the broader process review for approvals and implementation planning in June-July 2023 onwards.  UDIA WA’s Infrastructure Standing Advisory Group will continue to be engaged as the recommendations are finalised.

A clear and positive message throughout has been that Western Power is committed to urgent action in response to immediate challenges, within the framework that they are legally bound to operate, and to working collaboratively to deliver broader process changes to ensure enhanced service delivery for industry and community needs moving forward.

We take a solutions-based approach to our advocacy, and we will continue to work with Western Power and other service delivery and approval agencies on practical solutions to support our industry in the timely delivery of the affordable and diverse housing supply our state desperately needs.

1 week left to book for the 50th Anniversary State Conference

The UDIA WA State Conference in Bunker Bay is an annual favourite across the industry and this year is set to be yet another fantastic professional development experience.

Join nationally renowned speakers and experts as we contemplate the future challenges and opportunities for the urban development industry over the next 50 years.

The program includes presentations from journalist and economic specialist Michael Pascoe; urban futurist and planner Stephen Yarwood; strategic thinker Amanda Shipton and many more.

Given this event coincides with National Reconciliation Week, delegates will also have the opportunity to participate in an on-country experience led by Koomal Dreaming’s Josh Whiteland.

Join us at our favourite South West getaway from Wednesday 31 May to Friday 2 June 2023 as we consider what we have learned over 50 years and unpack the challenges and opportunities we need to prepare for in relation to urban development, city building, planning & policy, as well as sustainability and social trends.

This event is a fantastic opportunity to engage in good conversation with your fellow members and colleagues in a relaxed environment. We hope you can join us!

For more information and to book, click here.

Thanks to sponsors DevelopmentWA, Western Power, Taylor Burrell Barnett and JDSi Consulting Engineers for supporting this event.

Urban Development Index

This week UDIA WA were pleased to release the latest edition of our quarterly Urban Development Index which provides an overview of how the WA land market performed in the first quarter of the year.

The latest report revealed a continued moderation in land sales activity following a peak in sales in the September quarter 2020.

With sales now returning to more normal levels and the added pressure of interest rate rises and supply constraints, it is not surprising we have seen a 30% decline in the number of lots sold compared with the same time last year.  Encouragingly, there was a slight 4% increase in sales during this quarter which reflects ongoing demand from buyers despite current headwinds.

The average price of new land in Perth also remains stable, with the average price of lots sold increasing just 2% over the quarter to $242,145.

The latest report also includes analysis of the Perth, Peel and Regional markets by Urbis Director Tim Connoley.

To read the latest edition of the Urban Development Index, click here.

UDIA WA would like to thank our principal research partners Urbis, Landgate and CoreLogic for their assistance in putting these research reports together.

Help break the cycle of homelessness with UDIA WA

UDIA WA CEO Tanya Steinbeck will once again be heading up a UDIA WA team at the Vinnies CEO Sleepout on 22 June to raise much needed funds to help break the cycle of homelessness.

Last year the UDIA WA team raised in excess of $90,000 to support extremely worthy homelessness causes and the aim is to beat this target with an even bigger team this year.

This year, we are opening up our team to all members who want to join us and hopefully smash our 2022 total raised.

If you would like to join UDIA WA’s team this year, register here and join the UDIA WA team here.

Land Report

Over the weekend the latest edition of UDIA WA’s Land Report was published in The West Australian.

The Land Report uses UDIA’s exclusive data and includes key insights from UDIA members on the current state of the property market in WA with this latest edition featuring Parcel Property, Satterley, Peet among other industry voices providing an overview of the current state of the property market in WA.

To read the latest edition, click here.

Landgate TLA Amendments

As part of the modernisation of conveyancing from paper to electronic, paper Duplicate Titles will no longer be used from 7 August 2023.

The change is part of the Transfer of Land Amendment Act 2022, which was passed in Parliament last June.

Duplicate Titles that existed before the removal date will be rendered invalid and will no longer have any legal effect. Current registration requirements will continue to apply for all documents lodged until 4.30pm on 4 August 2023.

Find out more on the Landgate website.

Unemployment rate

Latest figures from the Australian Bureau of Statistics (ABS) revealed the unemployment rate across the country has increased slightly to sit at 3.7% with the WA unemployment rate receiving a similarly marginal rate rise to sit at 3.6% in April.

Despite the increase WA’s unemployment rate still sits as second lowest of all the states, behind only NSW at 3.3%.

The underemployment rate across the country was recorded at 6.1% with WA’s the lowest of all the states at 5.7%. WA’s participation rate was also the highest of all states at 69.1% with an employment to population ratio of 66.6%.