Welcome to 2019: a year for optimism in the market
The development industry in Western Australia is kicking off 2019 in an optimistic state of mind.
After a challenging few years, the positive signs in the broader economy keep coming and we are confident 2019 will be a year of recovery and moderate growth for the new land and housing market.
This positivity has been boosted by the forecast for an early return to surplus in the State Budget and the hope that more stable economic conditions will encourage the State Government to further invest in critical infrastructure for the future growth of Perth and the regions.
This type of investment is important for boosting the economy and ensuring strong employment across the state.
Government policy at all levels will be critical in supporting the potential market recovery in 2019.
At a federal level, the outcome of the election in May is likely to lead to changes in government policy that will have an impact on the market here.
The Federal Labor Party has made significant promises in relation to housing affordability, including announcing a $6.6 billion ‘affordable rental plan’ that will see 250,000 new homes built across the country over the next decade.
According to Labor, the program will provide annual incentives of $8500 per year for 15 years for newly constructed properties that are owned or managed by a registered community housing provider, and they will be mandated to provide 20 per cent below market rent for eligible Australian tenants on low and middle incomes.
This policy is a step in the right direction for growing the stock of affordable homes available to those who need them, as well as providing a muchneeded boost to the construction industry.
However, UDIA is concerned Labor’s current position on negative gearing and capital gains tax will jeopardise the broader supply of affordable rental accommodation that is delivered to the market via private ‘mum and dad’ investors each year.
At a state level, we would like to see tangible progress on the implementation of recommendations from the planning reform agenda that was initiated in November 2017.
The recommendations were handed down in May 2018 and we are yet to see a formal government response.
We would particularly like to see the recommendations around local government planning, community engagement and efficiency implemented so the industry can deliver projects to the community in a more timely and affordable way.
These issues are just the tip of the iceberg when it comes to the policy issues that UDIA will be navigating this year, with the aim to ensure governments at all levels support the market recovery that will benefit our state as a whole.