FIVE major property industry bodies have joined forces, presenting a range of policy support measures for the ailing market to the State Government.
Perth property prices have fallen more than 21 per cent since their peak in 2014 and work started on just 15,375 new homes in WA in the year to March 2109, the lowest result for any 12-month period since 2001.
The prolonged downturn prompted the “unprecedented alliance” with the Housing Industry Association (HIA), Master Builders Association (MBA), Property Council of Australia (PCA), Real Estate Institute of Western Australia (REIWA) and Urban Development Institute of Australia (UDIA WA) presenting a plan outlining urgent changes required to reinvigorate the market to Housing Minister Peter Tinley and Planning Minister Rita Saffioti yesterday.
The joint industry support package recommends:
• Increase Keystart purchase price cap to $550,000
• Combine and match Keystart’s ‘Couples’ and ‘Families’ income categories to match the new family limit of $155,000
• Increase the Stamp Duty exemption for First Home Buyers to $550,000 for existing stock in line with revised Keystart purchase price cap
• Introduce a stamp duty exemption for multi-unit dwellings
• Introduce a stamp duty concession for seniors to right-size
• Adjust the rate of the Foreign Buyers Surcharge to 4 per cent
• Deliver an additional 300 social housing dwellings
• Support population growth by reinstating Perth with regional migration status
“The residential market has reached a critical point where the state of the property industry is having a direct impact on jobs and growth in our economy,” UDIA WA chief executive Tanya Steinbeck said.
The property development industry is the state’s second largest employer, however since August 2015 more than 35,000 jobs in the construction sector alone have been lost.
“This is about the state government doing their part in stimulating broader economic growth, supporting job creation and ensuring more people in WA have a place to call home,” Ms Steinbeck said.
According to MBA WA executive director John Gelavis, the Keystart maximum property price tag of $480,000 is blocking access to Keystart loans for many people.
“It’s time to loosen the shackles by raising the limit to $550,000 and allowing more freedom in housing choices,” he Gelavis said.
“Income limits also need to be unlocked for couples, who are barred from Keystart if they earn more than $130,000 even though families have a $155,000 cap.
“Combining them into one category will help couples wanting a family home for the future but stymied by the deposit criteria of the big banks.”
Stamp duty has also been identified as another a major barrier for many looking to purchase property and is dampening market activity.
“Stamp duty is a significant cost for all WA home buyers but those buying apartments off-the-plan are charged more than house-and-land package buyers,” PCA WA executive director Sandra Brewer said.
“The buyer of an $800,000 off-the-plan apartment is charged $32,316 in stamp duty.
“Compared to an $800,000 house-and-land package where the stamp duty only applies to the land component, the duty would be around $20,000 less.
“Levelling the stamp duty playing field between apartment and house buyers will set Perth up for thoughtful growth so that as our city grows, we can create greater living spaces in existing suburbs close to public transport.”
Reiwa outlined is own six-point plan for the real estate market last week and president Damian Collins said that with first-home buyers accounting for one third of all residential property transactions in WA, more needed to be done to create greater choice within the established property market.
“By increasing the stamp duty exempt threshold to $550,000, 49 per cent of properties in the Perth central sub-region will become available for first-home buyers, which will enable them to live closer to the city,” he said.
“This will assist in achieving the Government’s infill targets as well as encourage people to live closer to existing transport infrastructure.”
HIA WA executive director Cath Hart said the combined impact of the end of the mining boom and credit crunch significantly affected the WA residential construction sector and has prompted the entire sector to unite to seek support get WA building again so it can continue to house, employ and train West Australians.
“Between the five groups, we represent a significant source of jobs and training in WA – after such a sustained period of difficult conditions, industry and government need to work together so we can continue to support those jobs,” she said.
“In such unprecedented conditions, it will take more than one thing to get industry moving again – that’s why a range of measures have been outlined.
“We are pleased that Minister Tinley and Minister Saffioti have heard our concerns and listened to our proposals to sustain a recovery.
“We look forward to hearing their further feedback in due course.”