Perth’s property puzzle: Builders’ Support Facility not enough to stem housing crisis
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The housing market in Perth has reached alarming levels of demand, far outstripping the available supply and leading to a historic crisis. In a concerted effort to address the dire shortage, the Western Australian government has implemented the Builders’ Support Facility, offering assistance to builders for expedited project completions. Despite this government action, local buyer’s agent Peter Gavalas from Resolve Property Solutions has voiced concerns that it is insufficient in tackling the root problems.
According to Gavalas, “The gap between the number of homes available and the number of people wanting them has never been wider, fuelling intense competition among buyers and driving up prices.” This sentiment reflects the severity of the situation as property prices and rental rates continue to climb, exerting further pressure on potential homebuyers and tenants who are already struggling in a competitive market.
Recently released statistics from the Real Estate Institute of Western Australia highlight the urgency of the issue, with property listings in Perth falling to a critical low. At the end of December, only 3,648 listings were recorded, a 23.4% decline from November and a striking 49.0% decrease from the same time the previous year. “Homes are flying off the market, with houses selling in just 10 days on average in December – nine days faster than the previous year,” Gavalas stressed.
A substantial contributing factor to this crisis is the population boom experienced in Western Australia. The Australian Bureau of Statistics documented a 3.1% surge in population in the year leading up to June 2023, representing the highest growth rate nationwide—a rate that has substantially exceeded the housing supply, further impacted by low completion rates and dwindling building approvals.
The Builders’ Support Facility, which offers interest-free loans to builders for projects languishing for over two years, aims to invigorate the construction industry. “This should give the construction industry a much-needed shot in the arm, so it’s definitely something that should be applauded,” noted Gavalas. Yet he highlighted that “it doesn’t do anything to kick-start fresh developments – so it’s like putting a band-aid on a deep wound.”
Gavalas called for urgent action to stimulate new construction that can keep pace with Perth’s rapid population growth, asserting that planning process reforms and reduced red tape are steps in the right direction but may not yield immediate results. “To bridge the ever-widening gap between supply and demand, Perth desperately needs new construction,” he said, suggesting that while government initiatives are acknowledged, more immediate and effective solutions are crucial to prevent further escalations in property costs and ensure the availability of housing for the city’s residents.