A $150 million state government affordable housing package will boost Western Australia’s real estate market and broader economy.
Industry groups welcomed the investment package, which would include construction of 500 social or affordable houses and refurbishment of 70 properties. The construction is expected to provide 1000 jobs.
The $150 million is in addition to $335.8 million budgeted for building and refurbishing social and affordable houses in the next two years.
The announcement follows a draft strategy by City of Melbourne to have developers include minimum affordable housing requirements in new development projects.
NAB has also announced it will partner with the not-for-profit sector in a $2 billion move to help plug the housing shortfall.
The Urban Development Institute of Australia said the package included many reforms suggested by industry.
UDIA chief executive of Western Australia Tanya Steinbeck said WA’s residential property market had endured “some tough times”, which had had a significant effect on jobs and the broader economy.
According to Corelogic, Perth’s housing values had been trending lower since mid-2014 but, in November, recorded their first month-on-month rise since early 2018.
Corelogic research head Tim Lawless said values edged 0.4 per cent higher in November after dropping a cumulative 21.3 per cent until the end of November.
“Over the past 13 years, Perth has seen house values move from being the most expensive across the capital cities to now be the lowest.”
However, after two years of declines, the rise in values means many first-time homebuyers and those re-entering the market could be priced out.
According to Moody’s Investors Service, affordability will deteriorate in 2020 as rising housing prices increase the risk of delinquencies and defaults.
Lawless said the Perth rebound came at a time when the material wealth of the city’s homeowners had been in decline for 5.5 years and was most evident in the high-end section of the market.
“Although housing values are rising across each of the valuation cohorts, the recovery trend is most concentrated in the premium sector of the market.”
Lawless said the trend was evident in Sydney and Melbourne, but premium-value properties in Brisbane, Perth and Darwin are also outperforming lower-value properties.
“As housing values become less affordable in these high-end markets, demand is likely to ripple outwards to the more affordable areas,” Lawless said.