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16 February 2019

State Budget opportunity to support property market recovery

While the Western Australian economy remains sluggish, there are signs of improvement that are likely to have a positive impact on the property market in the next 12 to 18 months.

I am pleased to see evidence of the early stages of improvement in recent rental market data that shows the vacancy rate in Perth is down to 2.8 per cent and the median rent per week is up another 2.9 per cent to $360 for houses.

It is still early days, but we are starting to see the flow-on impact to residential sales, with the average number of selling days in Perth down 9.3 per cent to 68 days. This is still significantly up on previous years, but a promising sign the tide may be turning.

Housing approvals are also on the up, with a 6.2 per cent improvement last month and a 5.7 per cent improvement year on year.

It is important this positive sentiment is nurtured given the importance of the property industry to the health of the broader WA economy.

On that note, UDIA is preparing a comprehensive state budget submission that will clearly outline the significant economic impact of the property industry and provide recommendations for how the government can further support the property market recovery, while at the same time assisting more buyers into the market.

Foremost, it is imperative land tax and stamp duty rates and thresholds are left alone. These taxes are often seen as easy pickings for increasing state revenue, at the detriment to those trying to purchase a new home.

In fact, UDIA would like to see the introduction of a stamp duty concession for seniors moving into ‘liveable homes’. Supporting seniors by removing one of the major financial barriers to downsizing will not only allow them to more easily access suitably placed and sized housing, it will also make vacated housing stock available to younger generations who need it.

Furthermore, we would like to see the expansion of Keystart so more potential homebuyers can access finance through this service. This option is becoming even more important as institutional lending criteria remains tight and people are finding it increasingly difficult to secure a loan.

Our submission will also look at broader issues such as investment in critical infrastructure, funding the implementation of much-needed planning reform recommendations and recommending a broader taxation reform agenda that considers the introduction of a broad-based land tax.

Overall, UDIA is committed to ensuring the ongoing health of the development sector for the benefit of the state and the people who live here.