The property type that could transform the housing sector

Australia is amid a housing crisis, and the market in Western Australia has not been immune. The twin pressures of soaring demand and slow supply pipelines have created a market where too many people are priced out, stuck in homes that no longer suit their lifestyle, or simply unable to find secure, long-term accommodation.

UDIA WA believes part of the solution lies in increasing housing choice, and a housing model that is already proving its value on the eastern seaboard but remains underutilised here in WA is Land Lease Communities (LLCs).

These communities offer a more affordable, faster-to-market housing option, especially suited to older West Australians looking to downsize without compromising on quality of life. Importantly, LLCs have the potential to unlock thousands of family homes back into the market, homes that are currently underutilised by empty nesters and retirees.

So, what are LLCs and why should property investors and policymakers alike be paying closer attention?

What are Land Lease Communities?

Land Lease Communities are typically secure, purpose-built, gated communities that offer high-quality, private dwellings along with shared amenities.

Think clubhouses, pools, gardens and recreational facilities, with the key difference from traditional home ownership being that residents own their home but lease the land it sits on from a private operator.

This model can bring several significant advantages.

Firstly, because residents don’t need to purchase the land, the upfront cost of purchasing a home is dramatically lower than traditional homeownership.

Secondly, because it is a rental arrangement for the land, residents may also be eligible for Commonwealth Rental Assistance (CRA), which is an additional support mechanism, particularly valuable for those on fixed incomes.

Crucially, LLCs are not retirement villages.

While they are primarily targeted at over-50s and active retirees, they do not operate under the retirement village model, which means greater flexibility, fewer restrictions, and in many cases, a stronger value proposition for residents and developers alike.

Why this matters for WA’s housing market

In WA, we are currently seeing a chronic shortage of housing stock across almost every market segment. From first-home buyers to families to downsizers, people simply can’t find homes that suit their needs at prices they can afford.

LLCs can play a key role in alleviating this supply bottleneck.

By offering a genuine and attractive alternative for downsizers who may feel trapped in a large family home, thousands of existing dwellings can be freed up and released back into the market for younger families. It’s a win-win as older West Australians get a lifestyle focused, lower maintenance home, and more family sized homes are returned to the broader market.

Nearly 4,000 households in WA reside in LLCs, but there is room to grow. Based on current development pipelines from six major operators surveyed by UDIA WA, a further 6,631 homes could be delivered across 20 planned communities in the coming decade.

And unlike traditional housing developments that can take 45-plus weeks or more to complete, homes in LLCs can typically be delivered in under 26 weeks for a single storey home. That speed-to-market is a critical advantage at a time when WA needs more housing urgently.

Why is WA housing being held back?

Despite the clear benefits, WA’s uptake of the LLC model has lagged behind the eastern states. This is primarily due to outdated and inconsistent legislative and planning frameworks.

Currently, there are two pathways for delivering LLCs in WA, the Caravan Parks and Camping Grounds Act 1995 and planning approvals under the Residential Parks (Long-stay Tenants) Act 2006) but there is a disconnect between the legislation and planning that needs to be addressed.

This lack of clarity in the current legislative and policy pathway increases costs, slows approvals, and can deter investment into what could otherwise be a rapidly growing sector.

What needs to change?

UDIA WA has released a new Position Paper that calls for targeted action to support the responsible expansion of LLCs across WA.

Our key recommendations include:

• clarifying the definition of “Park Home” and approved construction methods under existing legislation
• improving planning use definitions, including a new ‘Residential Park’ classification or confirmation and broader adoption of ‘Independent Living Complex’
• that any legislative or planning changes seek to increase consistency in how LLCs are dealt with by approval authorities, giving due consideration to the rights, responsibilities and protections of both residents and owner-operators, to reduce barriers and facilitate their roll out
• ensuring that any changes at state level do not impact residents’ eligibility for CRA.

Perhaps most importantly, we’re calling for a state-wide policy framework that creates a consistent and predictable environment for LLC investment and development, while still protecting the rights of residents and ensuring robust operational standards.

It’s time to act on red tape restrictions

WA cannot afford to let red tape stall innovative solutions to its housing crisis.

Land Lease Communities are not just about affordability, they’re about choice, lifestyle and ensuring the housing system reflects the diverse needs of our population.

UDIA WA is calling on government at all levels to work with industry to modernise our frameworks and help to unlock the full potential of Land Lease Communities to deliver better housing outcomes for all West Australians.