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Western Australia: lessons in woe to go

In Western Australia, the housing market is experiencing a high after a long-term slump. So, what can the rest of us learn about handling rapid rise from a standing start?

Author

Cath Hart, HIA Executive Director – WA

By and large, the majority of Western Australians are relaxed about our detachment from the rest of the nation. Perth is often described as the most isolated city on Earth, some 2100 kilometres from our nearest capital neighbour Adelaide, and our state covering roughly the size of France, Turkey, Kenya and Spain combined.

But with distance comes tranquillity, unspoiled spaces, an abundance of sunshine, culture and yes, Quokkas. Being isolated has always been one of Western Australia’s defining characteristics.

The joy in division

It is really not surprising that our remoteness would work in our favour when COVID-19 very quickly escalated from a foreign cause of concern to a global pandemic in early 2020.

We were all entering unknown territory. For some, the challenges were more personal – being deprived of seeing international and interstate friends and family – while for others, financial stress and uncertainty as either an employee or a business owner dominated their outlook.  

For the WA residential building industry, we could certainly understand why people wouldn’t want to make a significant commitment and investment to building a home in the midst of a global pandemic. 

But, we also found out circumstances were set to change quickly.

new development
WA's remoteness worked in its favour when COVID-19 quickly escalated from a foreign cause of concern to a global pandemic.
roof frame
The WA building industry's first reprieve came with HomeBuilder, closely followed by the $20,000 Building Bonus.

The starting point

In March 2020, the outlook for new housing was extremely challenging. HIA’s forecast had predicted just 9271 starts, compared to a long-term average of 22,000 each year. As COVID-19 emerged, the extremely short pipeline of work in Perth looked set to dry up in just a few months.

The bounce

The first reprieve came in June last year when the federal government announced the HomeBuilder scheme, before the WA Government introduced the state’s $20,000 Building Bonus, with both grants significantly helping potential homeowners get the financial assistance to help take the next step in building.

The truth was, with our industry heading for a massive cliff, the outcome would have been dire had the building grants not been introduced when they were. Fast forward to the early stages of 2021 and WA is now on track to recuperate faster than other jurisdictions. 

For the country as a whole, the economic policy responses to the pandemic reconfirmed the important role residential building plays in recovery, growth and job creation. 

Obstacles aplenty

Yes, WA at the moment is thriving, but the reality is we have found ourselves in a catch-22 situation. Our builders’ books filled up in a flash, while consumers couldn’t fill out their applications fast enough.

While these grants saw demand surge, the difficulties that would naturally arise from such a sudden shift in activity came about just as rapidly. Six months on, the challenges of access to titled land, dealing with council approvals and pressure on labour is being felt – especially with WA’s border closures meaning interstate workers at times face strict exemptions to even enter the state. Issues with lending and slow processes, due to the impact in offshore countries that provide support to Australian banks, create even further obstacles.

WA, like other states and territories experiencing a similar upswing in activity, is also looking at possible issues with material availability, which will bring increased prices. Builders will have the added pressures of maintaining relationships with their trade base and supplier networks to manage the delivery process in the year to come.

bricks
The building grants have given the WA industry the confidence and reassurance there will be a more sustainable pipeline of work. 
Ultimo Constructions duplex
Condensed timeframes to turnaround designs and complete quotes for clients proved challenging for WA builders.
Image courtesy Ultimo Constructions

Pressure and promptness

According to Rebecca Rossi, General Manager at Ultimo Constructions (2020 HIA Australian Professional Small Builder/Renovator), the condensed timeframes to turnaround designs and complete quotes for clients proved most challenging.

Operating in a tight-knit team of six people, Ultimo had no choice but to adapt to the steep rise in activity. With the increased workload in the second half of 2020 coming about without warning, the team at Ultimo had to find a way to successfully conquer these challenges – a familiar story across the state. 

Rebecca admits the next concern will be uncertainty around the frequency of work on offer once the benefits of the grants start to moderate, but remains confident their team will be able to maintain a strong position in the Perth housing market. 

building feature

For the country as a whole, the economic policy responses to the pandemic reconfirmed the important role residential building plays in recovery, growth and job creation. 

 

We have adaption in hand

While WA was blessed to avoid the experiences seen in other parts of the country, our sense of ‘normality’ has adjusted. Frequent hand sanitising, the use of contact registers, builders becoming familiar with HIA’s SafeScan initiative, meetings with clients over Skype or Zoom – this has all become part of our new daily routines. So it is a shout-out to the industry nationwide that has shown we have been able to adapt and grow in our ability to diversify.

The building grants have given the WA industry the confidence and reassurance there will be a more sustainable pipeline of work. While the virus hasn’t been totally eradicated, WA’s lengthy period without community transmission has meant businesses have been able to resume work under a new ‘COVID normal’, allowing our economy the chance to recover incrementally.

WA may have had a more dramatic rise in activity in this instance, the industry across the country has dealt with circumstances we could have never prepared for, and we’re now looking ahead to a much more consistent pipeline of work. 

This year we get the opportunity to tell the next chapter that comes after the building grants – telling the stories of clients who have built their dream home when 12 months ago they might have thought that possibility was not within reach. 

 

Not an HIA member yet? By joining Australia’s largest national association for the residential building industry, you’ll get access to a range of member benefits, as well as industry products and business services designed to help you manage, operate and grow.

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