Government building bonus grants have seen West Australian land sales surge from about 60 blocks per week to 500.
Master Builders WA boss John Gelavis said in March his members were reporting a 40 per cent decline in work but since the bonus became available they had seen land and house sales triple.
“It has really turbocharged the industry,” he said.
Mr Gelavis said he had asked for the bonus to be extended further so the industry had more time to handle the work, which would need to be completed without the help of interstate workers.
West Australians who build a new home can access $20,000 from the state government on top of $25,000 on the table as part of the Commonwealth’s HomeBuilder scheme.
Premier Mark McGowan said the state’s grants program, launched in June, had led to an enormous upsurge in the WA building industry.
“Combined with the Commonwealth grant it has driven enormous interest and enormous activity in land sales across Western Australia,” he said.
“We have seen around 500 blocks of land sold per week in Western Australia and that’s driven up demand for the building bonus across the state.”
He announced a new coronavirus support package, with the first part an additional $30 million to extend the building bonus program.
“This will allow many more people to be able to access this grant and ensure many people across the state are employed in building, particularly in residential construction,” Mr McGowan said.
Treasurer Ben Wyatt said the bonus was having an impact around the state and had been more popular than expected, with some towns seeing land sales after a long period of inactivity.
The July lending figures saw a 94 per cent increase in finance for not just owner-occupiers but investors as well. This was important, bearing in mind the tightening rental market.
He said land sales in regional WA were going “very well”.
“In some parts of Western Australia, [we’ve seen] land sales where we haven’t seen Development WA move a property in many years.
“The building bonus is certainly having an impact not just in metropolitan Perth but across Western Australia built around the fact Development WA has revalued their asset base.”
He said Treasury had expected a 12 per cent contraction in the economy in the June quarter, but only 6 per cent eventuated, a sign the state was doing better than expected.
“What is going incredibly well is the building bonus,” Mr Wyatt said.
“The border has allowed our businesses to get back to what they do best, which is operating in an unconstrained environment.”
Industry groups welcomed the extra funding but called for the bonus to be extended beyond December to smooth out the spike of expected work and avoid labour shortages.
Urban Development Institute of Australia WA chief executive Tanya Steinbeck said the higher demand reinforced the need for an extension to the delivery timeframes to allow industry to safely provide the houses.
Housing Industry Association WA executive director Cath Hart said every $20,000 grant generated about $250,000 in extra spending from consumers across WA’s domestic economy.
“The flow-through effects of this over the next 12-18 months will underpin our ongoing recovery,” she said.
But Ms Hart said they were worried consumers might miss out on getting their grants because of the tight start timeframe and land and labour shortage.
“These issues are proving hard to solve because the schemes require on-site work to site start very quickly, whereas the grants pulled home building in WA from a 20-year low to an historic high overnight,” she said.
“Consumers are signing building contracts on untitled land, but we know there’s more to getting a block titled than just moving some dirt around, and a builder won’t be able to start until some time after that which means the six month start is not going to be achievable for some.
“We’d like to land developers to be given until 30 June 2021 to title lots, and once that’s done we’d like to builders to be given six months to commence after lots are titled.”
Source From: WA today