Housing takes centre stage in lead up to 2025 elections
Elections are being held around Australia in the coming year or so and one issue - housing - has become the central topic that could shape the immediate futures of political parties around the country.
With both a Federal and Western Australian state election looming in early 2025, the housing supply crisis that is gripping the nation is taking centre stage as a key election issue.
It is not often that housing takes the spotlight in an election campaign. It tends to be a side issue or an afterthought as part of wider election commitments from both sides of the Parliament.
Perhaps that is why we find ourselves in such a dire situation as population continues to rise and the delivery of quality housing across the continuum falls short.
The current housing supply crisis is impacting markets across the country, and it is no different in Western Australia.
Housing has not been treated as essential infrastructure by successive governments over many years, as it should be in any growing nation, and we are now suffering the consequences with escalating home prices, record low rental vacancy rates and homeless numbers rising.
To highlight the ongoing pressure on the housing supply pipeline in Western Australia, the Australian Bureau of Statistics (ABS) recently released population growth figures for 2022-23 that show Perth experienced the highest population growth rate of any capital city in Australia for that 12-month period.
As of 30 June 2023, Perth’s population was just over 2.3 million and the annual growth rate was 3.6 per cent.
That growth trend means the forward supply of housing in the medium and longer term remains critical.
While population growth is an important aspect of economic growth and the ability to access much needed workers, the further pressure this puts on our housing markets is all too obvious for anyone in the market to purchase or rent a home.
Greenfield suburbs needed
According to the most recent Real Estate Institute of WA figures, the rental vacancy rate in Perth remains at just 0.4 per cent and the median rent for a house is $650 per week and rising. The median number of selling days for a house on the market is down to just eight days and listings are down to just above 3,000 properties in April 2024.
These are dire statistics, and the key is getting more new homes into the forward supply pipeline so that we can meet demand.
In recent years, greenfield development in new areas has had greater capacity to deliver new housing supply, with new suburbs in growth areas such as Alkimos-Eglinton, Byford and Brabham-Henley Brook named by the ABS as the top three largest growth areas in Greater Perth.
Interestingly, if you look back just over a decade ago in 2011, Alkimos – Eglinton was home to just over 100 people. That is astronomical growth and testament to the capacity of some of these newer growth areas to deliver quality, affordable homes to the market.
However, we have seen that the strain is being felt in these new areas, as dwelling completions continue to decline.
Not even close to meeting housing targets
According to UDIA’s State of the Land Report released in March this year, dwelling completions are down 7 per cent in WA, and we are expected to undershoot the National Housing Accord’s annual dwelling target for Greater Perth of 20,000 by 40 per cent in 2024.
Supporting a balance between delivering housing in those new areas as well as in infill locations in existing areas is critical to future housing supply. That is so people have access to a range of homes in different areas to suit their needs.
State and federal governments have made significant moves to address housing supply shortages across the board, particularly in the last 12-18 months, however significant challenges remain in new and existing areas.
In new areas in Perth and Peel, there is land zoned for urban or future urban development, however, the reality is not all that land can be readily developed to provide housing due to a myriad of constraints.
We need more streamlined planning processes, more efficient infrastructure planning and provisioning and more effective environmental approvals processes to facilitate new housing delivery in these areas.
In existing areas, there is a critical need to enable viable medium and higher density development in key locations, through funding catalyst infrastructure and providing tax support, such as making permanent the off-the-plan transfer duty concession.
UDIA WA has a keen focus on the upcoming State Budget in May and then the elections at state and federal levels come May 2025. We hope that the significant focus on housing as we hear more from both sides of Parliament about their solutions and platforms for the upcoming election will lead to real and significant improvements in housing supply pipelines.
