INDUSTRY CALLS FOR MORE TIME TO DELIVER NEW LAND AND HOMES TO WA MARKET
The Urban Development Institute of Australia (UDIA WA) is calling for an extension to the timeframe to commence construction of a new home that has been set under the current State and Federal government housing stimulus measures to ensure quality and safety aren’t compromised in delivering the final product.
The call comes as new dwelling forecasts from WA’s Housing Industry Forecasting Group (HIFG), released today, have been lifted to 17,000 for the 2020-21 financial year.
“Dwelling commencements are expected to increase this year due the significant impact of the State and Federal housing stimulus measures that are in place until the end of the year,” UDIA WA CEO Tanya Steinbeck said.
“This lift is directly due to the stimulus measures in place, which have caused a huge flurry of sales as buyers rush to buy and commence their build before time runs out,” Ms Steinbeck said.
At a state level, the criteria for eligibility for the Building Bonus grant requires that an applicant sign a comprehensive home building contract by 31 December 2020 and commence construction on a new home within six months or before 30 June 2021.
“As an industry we have gone from a sustained period of low market activity to a huge spike in land sales within a couple of weeks which means land developers are having to deliver titled land to the market at record speed to meet the deadline set by the grants. Whilst it’s a fantastic outcome for jobs & the economy, we need to ensure we can continue to deliver high quality product in a safe and sustainable fashion in time for the consumer to benefit,” Ms Steinbeck said.
“What UDIA would like to see, is an extension of the timeframe required for the full building contract process to be finalised. This includes title issue, valuations and formal finance approval by 30 June 2021, with building commencement within a further six months” Ms Steinbeck said.
In short, the new timeframes would look like this:
- Step 1: Signed land contract and signed preliminary contract to build with an approved lot plan by 31 December 2020.
- Step 2: Comprehensive building contract finalised including titles and formal finance approval by June 30 2021.
- Step 3: Commencement of building (significant earthworks) within six months of title
“Developers have practically sold out of titled land at this point,” Ms Steinbeck said. “While selling untitled land is not a major issue in normal market conditions, there is now an extremely tight timeframe to get land titled so that buyers can get their new house construction started.”
“The federal and state government have wisely invested in an industry that generates significant jobs and economic activity, we are just asking for a little more time to ensure industry can produce the quality product that consumers deserve without putting employees at risk in the rush to deliver.” Ms Steinbeck said.
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