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All the media and talk at the moment is centred around the housing crisis in particular the massive shortage of rentals. While all the talk is fine and most certainly needed, action is what’s required and action is what has been lacking for some time. As a result of this we are in a situation where we are being reactive rather than proactive and therefore there is no quick solution because everyone is so busy scrambling with all the chaos. Being that I work in the industry this has been coming for some time but the relevant authorities have fallen asleep at the wheel and are madly trying to conduct reports for solutions as we speak.
Some of these solutions have been right under their nose for years, others need more work and will take time. The reality is we need more houses. With over 450 people on social housing waiting lists in The Great Southern and over 16,000 state wide this is an issue that will not being going away anytime soon. For more social houses you either need to purchase established in a hot market ( is this the best use of tax payers money? ) or buy land and build. Builders I talk with have advised me there is a 2 year wait to build a house. This is due mainly to the government grants program in mid-2020 where the market got flooded with buyers wanting to purchase land and build. The WA Housing Strategy for 2020 – 2030 report only factors in to build houses in WA that’s not going to make a dent into providing enough. That’s not going to cut the mustard by any stretch of the imagination. So tell those people looking for a house that there is nowhere to go for a few years! And as I write this blog there are only 44 properties for lease in Albany, 10 in Broome, 2 in Esperance and 23 in Busselton. This is a WA issue that’s not going away any time soon.
If you want investors to provide more housing then you need to encourage that. Amendments to the Residential Tenancy Act (RTA) continue to discourage them from buying and with more proposed changes that give landlords less rights, why would they want to buy and supply housing. I’d hate to be a landlord in Victoria with the tenancy law changes there recently. Without investors you don’t have a supply of housing in the first place. It will do tenant advocates to remember this when pushing for changes to the RTA because we need more supply not less of housing. Over 80% of Australian investors are mums and dads owning only 1 investment property. And government want to make it harder for them with more proposed changes to the RTA! It’s the majority of mum and dad investors who are generally borrowing and taking all the risk. While I do agree that there are some landlords that take the mickey, in my experience this is few and far between. Yes come down on them if they do the wrong thing but you need to encourage investors to provide more houses.
Another barrier for investors is stamp duty. This is a rip off and change is required. Real Estate Institute of WA (REIWA) has been lobbying the state government for ages now that at least a 75% reduction is required. We have one of the highest stamp duty rates in the country. I guess there must be a build-up of wax in the ears of these people that are meant to be listening, because the message simply isn’t getting through. At least NSW is trying something different with a different kind of property tax that at least allows some flexibility. It still may not be prefect but at least it’s something different. WA on the other hand is in la la land. If it’s serious about providing more housing it will do something now not wait for a budget, half year review or whatever other excuse they come up with.
An impressive read if you want to find more solutions is the Unlocking Housing Report. It’s a 50 page report that tackles all the important housing issues. More importantly it provides solutions which can be acted upon. Some I agree with and others I don’t. Take a read for yourself – the link is below. One thing is for sure, less talk more action is required before it gets even worse.
By Jeremy Stewart -Director of Merrifield Real Estate