Housing centre stage at all levels of government but is that alleviating the crisis?

It has been a big few days in politics with the Federal Government handing down their budget on Tuesday night and in Western Australia, the Cook Government tabled their State Budget for 2024-25 last Thursday.

With a housing crisis impacting markets across the nation, the state and federal budgets featured a strong housing focus.

While the right messaging is being conveyed by both levels of bureaucracy, UDIA has warned that more direct action needs to be taken to meet housing needs in the immediate and longer term.

In Western Australia, this direct action needs to be taken in order to put a dent in the forecast 30,000 housing shortfall expected over the next five years. 

Both budgets have put significant funding into social and affordable housing, with WA investing $1.1 billion towards increasing social and affordable housing that will largely be delivered by government and the community housing sector in priority locations, such as METRONET precincts. 

At a federal level, $9.3 billion has been earmarked over five years under the National Housing and Homelessness Agreement (NHHA) to build and repair social housing.

This is, of course, much needed given the housing waitlists and it is welcomed expenditure, however, with 96 per cent of housing supply in WA being delivered by the private sector, greater support is needed to deliver the homes that people need, faster.

Infrastructure spend inadequate

So, what do we still need?

Infrastructure and environmental constraints have been identified as the top two handbrakes on getting new land to market in WA. That is on top of ongoing worker shortages.

Again, we saw welcome expenditure ($1 billion) from the Federal Government on enabling infrastructure, including roads, water and community facilities to support new housing supply in Tuesday’s Budget Papers.

This is indeed a good step in the right direction, but the funding allocation does fall short of the tens of billions needed for essential infrastructure across the country.

In WA, the State Government announced an eye-watering $42.4 billion infrastructure spend over the next four years across a range of projects.

These types of major infrastructure projects will continue to compete with the residential construction sector for skilled labour, despite the state’s $85 million boost to fund 150 more apprentices. 

Streamlining approval processes

Federal and state governments are also saying the right things when it comes to streamlining environmental approvals but the devil is always in the detail.

The Feds have allocated funding toward implementation of the EPBC Nature Positive Plan and establishing the Nature Repair Market, as well as funding to improve environmental approval decision making. These actions will be critical to designing a clear, simple and efficient environmental approvals system for industry.  

It is imperative that this work is done in close coordination with the State Government to avoid more overlap and unnecessary red tape between the two levels of government.

Apartments becoming unfeasible projects

Getting down into the detail, at a state level, ongoing construction cost pressures in the apartment market are making affordable, high density development difficult to deliver and we need to ensure that blockages in that supply pipeline are addressed so much needed housing diversity and supply is brought to the market.

The Infrastructure Development Fund is a welcome mechanism that was introduced last year to fund headworks charges for apartment projects, however, for many projects, the funding available via that source is simply not enough to get projects over the line.

UDIA WA will continue to call for an expansion of the Infrastructure Development Fund to a maximum of $20,000 per apartment and to include other statutory charges, such as land tax, to get shovel-ready projects off the ground. 

Funding for key pieces of catalyst infrastructure to unlock the delivery of thousands of dwellings in appropriately zoned growth areas is another top priority to bring an end to the housing supply crisis. 

Overall, the right sentiment is there when it comes to alleviating housing supply pressures at the federal and state level, but a much more integrated approach is needed to coordinate different levels of government and agencies so that more housing can be delivered right across the continuum.

This ranges from social and affordable housing through to rentals and home ownership options for first home owners, upsizers, downsizers and everything in between.

As we now head toward both state and federal government elections in early 2025, our priority will be ensuring that all candidates and parties are aware of the critical issues facing housing supply and what more can be done to address the issues.