From the CEO
Yesterday we had confirmed what West Australians have known for some time. The cost of construction and day to day living is a lot more expensive than it used to be. Nationally inflation has jumped to 5.1%, the highest since the introduction of the GST in 2000 – with dwelling prices a significant contributor.
Here in Perth, new dwelling purchases by owner occupiers rose a whopping 15.8% due to rising materials and labour costs with Brisbane having the second highest increase at 6%. So the perfect storm we thought we saw on the horizon has most definitely arrived. Lets add to that the impending interest rate rises with money markets pricing in a cash rate of about 2.5% by the end of this year which would mean at least a 0.25% increase each month until December.
The extent to which households are able to absorb these interest rate increases on their mortgages remains to be seen. However combined with significant increases in other costs of living one can assume that belts will be tightening and sadly, mostly for those that can least afford it.
I’m looking forward to sitting down with the Minister for Housing at our upcoming Industry Lunch in June to take a deep dive into how the State Government intends to navigate this perfect storm from a housing supply perspective. The upcoming State Budget to be released on 12 May will be an interesting insight into where our economic windfalls will be invested, particularly with a Federal landscape firmly focused on housing affordability and supply leading up to polling day on 21 May.
Inflation records highest rises since the introduction of GST
The latest figures from the Australian Bureau of Statistics, released yesterday, found the Consumer Price Index (CPI) rose 2.1% in the March 2022 quarter and 5.1% annually, leading many economists to suggest the RBA will raise the cash target rate at its Monthly Monetary Policy Meeting on Tuesday.
The most significant contributors to the rise in the March quarter CPI were new dwellings (+5.7%), automotive fuel (+11.0%) and tertiary education (+6.3%).
Annually the CPI rose 5.1%, with new dwellings (+13.7%) and automotive fuel (+35.1%) the most significant contributors.
“Strong demand combined with material and labour supply disruptions throughout the year resulted in the highest annual inflation for new dwellings since the introduction of the GST,” Head of Prices Statistics at the ABS, Michelle Marquardt said.
“Annual price inflation for automotive fuel was the highest since the 1990 Iraqi invasion of Kuwait.”
Underlying inflation measures reduce the impact of irregular or temporary price changes in the CPI. Quarterly trimmed mean inflation increased to 1.4%, the strongest movement since the beginning of the series in 2002. Annual trimmed mean inflation increased to 3.7%, up from 2.6% in the December quarter.
“Annual trimmed mean inflation was the highest since 2009,” Ms Marquardt said. “This reflected the broad-based nature of price rises, as the impacts of supply disruptions, rising shipping costs and other global and domestic inflationary factors flowed through the economy.”
WA mask mandate to drop following soft landing
As of 12.01am tomorrow, Friday 29 April, the majority of WA’s remaining COVID-19 related restrictions will be eased. This comes following the announcement from the State Government that WA’s peak Omicron wave has passed and we reach a triple vaccination rate of close to 80%.
The biggest change sees the removal of mask mandates for indoor environments, the removal of all indoor capacity limits and a change to close contact requirements which will see asymptomatic close contacts no longer required to isolate for 7 days.
As per the announcement masks will no longer be mandatory, except for those aged 12 and older (including Year 7s) in high-risk settings including hospitals, residential aged care, disability services facilities and correctional facilities, and also at the airport, on public transport, in rideshare and taxi services, and other passenger transport. Masks are encouraged where physical distancing isn’t possible.
From tomorrow patrons are no longer required to show proof of vaccination when dining in at hospitality venues, however mandatory vaccination requirements will remain in place.
For more information on the changes set to come in from tomorrow, click here.
Six steps to growing better cities and regions, and increasing housing supply according to UDIA
UDIA National calls on political leaders to seize the opportunity and develop plans which put core infrastructure as their central focus, enabling Australia to exit the pandemic stronger than when it began.
Great cities and regions don’t just happen automatically. They demand foresight, planning, early investment, and the capacity to respond to the needs of people who already live or aspire to live in them.
“Consistent benchmarking of the base services required for liveable cities, suburbs and regional towns must be undertaken, including looking-forward at future demands. This should inform early investment in both large and small infrastructure such as public transport, urban and open spaces, technology, schools, hospitals and the environment, and be linked with capacity to unlock housing supply,” said Maxwell Shifman, UDIA National President.
“Governments will yield a much stronger dividend from a cohesive and proactive approach to infrastructure investment. This would accelerate better and more affordable housing outcomes, particularly coupled with larger projects such as rail that support urban renewal and shape cities, better connecting communities and improving urban amenity,” he added.
UDIA NSW’s Building Blocks research report shows that a $1 billion investment in infrastructure funding across the Sydney Megaregion would unlock over 100,000 greenfield dwellings within three years. It stands to reason that this staggering outcome could be replicated nationally.
UDIA National’s 2022 Federal Election Campaign Platform – A Plan for Prosperity – includes six steps to ensure that long-term growth corridors for housing and related infrastructure properly align to demographic trends and strategic plans:
- Synchronising investment with the objectives of the long-term strategic land use and infrastructure plans in place for each of our major capital cities and regions.
- Ensuring integrated approval regimes are applied to infrastructure that also accommodate housing (and other uses) which are attached to or benefit from them.
- Linking higher levels of infrastructure funding to regions prepared to accept a greater share of population growth, synchronised with increases in housing supply.
- Putting a greater focus on local-scale infrastructure which can generate significant improvements based on a relatively small spend and in turn kickstart new housing opportunities.
- Charting and removing the barriers to the delivery of more diversified housing stock, including supporting build-to-rent, and encouraging mixed tenure affordable housing.
- Planning for an ageing population by ensuring the diversity and facilitation of housing choices for seniors is accommodated.
“We need to begin the hard work now to plan for what our major cities and regions look like in 2030 and the decades beyond and get delivery started,” said Mr Shifman.
Updated Notice of Exemption (Clause 78H)
This week Planning Reform at the Department of Planning, Lands and Heritage informed UDIA WA of updated notice of exemption (Clause 78H), which was gazetted on 22 April 2022. The latest changes respond to the changes in Western Australia’s COVID-19 response, as well as Regulatory changes which have replaced certain exemptions in the Notice. This includes the following changes:
- Certain exemptions have been removed as these have now been replaced by exemptions in the Planning and Development (Local Planning Schemes) Regulation, 2015 (Regulations):
- Removal of exemptions relating to certain land uses. A 90-day expiry date now applies to these exemptions.
- Removal of exemptions relating to car-parking for non-residential development and the payment of cash-in-lieu.
- Removal of the need to obtain approval for signage relating to hotel, tavern, restaurant/café (or similar land uses).
- Clarifying the exemptions to home businesses only apply during a Lockdown.
- Extending the applicability of the exemption for agricultural workers accommodation in the Shires of Manjimup and Harvey to all local government areas.
- Clarifying the exemptions applicable to non-conforming uses will expire on the day after the State of Emergency Declaration ends.
- Removal of exemptions relating to consultation, advertisement, applications and/or forms.
To view the updated exemption, click here and to view the explanatory notes for planners, click here. For more information, click here.
Share your success with The Urbanist
UDIA WA are in the process of putting together the next edition of our thought-leadership magazine The Urbanist and there is still a chance to get involved with the edition.
Positioned alongside engaging editorial content, we have a limited number of advertising spaces available for members to share your key messages.
Reach out to our communications team here for more details on how we can include your organisation in the upcoming edition.
Delivering Shelter through the Perfect Storm
This week UDIA WA announced details of our upcoming June Industry Luncheon where we will take a deep dive into the mind of the Minister for Housing; Lands; Homelessness; Local Government the Hon. John Carey MLA and the strategies to address housing supply in a new world order.
As the world, our nation and our State continue to navigate through the implications of the pandemic on every aspect of our lives – the long term challenge of ensuring everyone has a place to call home has never been greater. From crisis accommodation to affordable rentals to home ownership, no one is untouched by the workforce shortages, supply chain issues and cost of living impacts of today.
A perfect storm is an opportunity for leaders to emerge and captain the ship as our community is tested, to ensure we emerge stronger on the other side. At the housing helm in Western Australia, the Hon. John Carey MLA has enormous responsibility with a portfolio that holds many of the levers to drive housing outcomes.
Join us as we take a deep dive into the mind of the Minister, the strategies he is employing and how he sees the private sector steadying the ship over the coming months including:
- Leveraging each Ministerial portfolio for better housing outcomes
- Highlights from the FY22-23 State Budget & Federal Election Commitments relevant to housing supply
- Using alternative construction methods to deliver housing in a constrained labour & materials environment
- Unlocking underutilised government land to deliver housing choice
To book your place, click here.
Our thanks go to our Industry Partner DevelopmentWA, Environmental Partner Strategen JBS&G and our Networking Partner JDSI Consulting Engineers for supporting this event.
Latest State of the States released
Tasmania has once again been named as the best performing economy in the country for the 9th consecutive quarter, according to the CommSec State of the States State and Territory Economic Performance Report.
Despite Tasmania leading the way once again the report notes that in the previous survey Tasmania led on four of the eight indicators, however in the latest survey Tasmania now leads on just one indicator.
The report also notes there is little to separate the other economies with Victoria second; Queensland and Western Australia equal third; the ACT and South Australia equal fifth; NSW seventh; and the Northern Territory eighth.
The equal third position for Western Australia has equalled its best ranking in 7½ years and while the report suggests the opening of local and foreign borders will present challenges and opportunities in coming months, it says Queensland and Western Australia may benefit most from the opportunities presented.
To read the report in full, click here.
Pilot Build-to-Rent development proposal for Stirling Towers
The McGowan Government has today released an Expressions of Interest (EOI) for an innovative pilot project to transform a former public housing site in Highgate into a contemporary build-to-rent development with ongoing tenancy and property management.
Early tender advice in February targeted Community Housing Providers (CHP) and CHP-led consortia to take up the opportunity to redevelop the former Stirling Towers site on Smith Street in partnership with the Department of Communities.
As part of the proposed redevelopment, the site would be made available under a Ground Lease for a term of up to 49 years and it is estimated that the project will deliver approximately 100 new rental dwellings, with around 30 per cent allocated to those on the public housing waitlist.
Stirling Towers was a social housing complex constructed in 1971 consisting of one 12-storey tower and one three-storey tower.
The Smith Street Build-to-Rent project would seek to replace the existing towers with a modern mixed-tenure residential development offering social, affordable and market-price rental apartments, with integrated asset and tenancy management services provided under a ground lease with a CHP.
The Smith Street Build-to-Rent project is a key component of the Government’s Housing Diversity Pipeline of sites identified to deliver social housing stock in the short to medium term.
EOI information can be found at https://www.tenders.wa.gov.au/watenders/index.do Tenders WA reference number: DOC9616122
Last remaining spots for Golf Day
UDIA WA encourages anyone wishing to enter a team into our Annual Golf Classic this year to do so as soon as possible as we are down to our final remaining spots.
Each year this event is an extremely popular and enjoyable event for all attendees and with only a handful of registrations available, now is the time to book your spot before we completely sell out.
For more information, click here.
Our thanks go to our sponsors for this year’s event, Major Sponsor Landscape Australia Construction, Drinks Cart Sponsor Stockland and Hole Sponsors Longreach Recruitment, Richard Noble, RAC Property Finance and Opticomm.