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 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.
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.