While HIA supports both the intent and the consultative process undertaken to review the HBCA, it is concerned that some proposed reforms go too far and shift excessive risk onto builders. This, in turn, is likely to increase the cost of housing and constrain supply.

“We have just seen two budgets focused on improving housing affordability and increasing supply for all Australians. Within a week, the State Government has released a reform paper that risks slowing supply and driving up prices,” said HIA Executive Director WA, Michael McGowan.

“Several of these recommendations appear to prioritise consumer protection without fully considering the commercial realities. This will inevitably increase the cost of building homes and influence the types of projects builders are willing to take on,” Mr McGowan said.

“When the report acknowledges that builders are facing higher upfront costs yet proposes reducing the deposit limit for contracts above $615,000, it raises serious questions about the practicality of these measures.

“In what other industry would a purchaser have the right to challenge a price increase up to three years after it has been applied? This is not commercially viable, nor is it expected in other sectors. Builders should not be held to a fundamentally different standard.

“The more risk that is transferred to builders, the more expensive home building becomes—and the fewer participants there will be in the market.”

The reforms also propose removing land titles as a valid cause for construction delays, limiting a builder’s ability to adjust pricing, and prescribing progress payment stages in legislation similar to the Victorian model, which is currently under review.

“The State Government and its agencies are responsible for issuing land titles and ensuring sites are ready for construction. We know there are significant delays in this process, yet the reforms suggest shifting that risk onto builders,” Mr McGowan said.

“Embedding progress payment structures in legislation is a sure way to stifle innovation. Prescribing when and how builders are paid will only create further ambiguity as construction methods continue to evolve.

“Banks already exert significant influence in this sector. These reforms risk further entrenching that position, rather than supporting a balanced and sustainable industry.
“It is also proposed that consumers be able to lodge complaints without putting them in writing. This will increase the likelihood of frivolous claims, diverting builders’ time into dispute resolution rather than building homes.”

HIA does, however, support elements of the reform package, including the Home Building HQ initiative—provided it is accessible to all participants in the building process, not just consumers—the review of building inspection services, and clarification that price increases cannot be passed on once construction has commenced.

HIA looks forward to continuing to work constructively with the State Government through the next phase of consultation to ensure reforms support increased housing supply and improved affordability across Western Australia.

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