The state government of Western Australia has announced another round of stimulus for the housing market in a bid to support the construction sector and the economy.
The $444m housing stimulus package aims to support around 4,300 jobs across Western Australia. A huge chunk of the package will be intended for social housing projects, which will help refurbish 1,500 homes, build 250 new dwellings, and deliver maintenance to 3,800 regional homes.
The stimulus package allots $117m for the Building Bonus grant, which will provide $20,000 cash aid to homebuyers who build new houses or purchase a property in a single-tier development such as townhouses. Interested homebuyers should sign up before the year ends.
The state will also allocate $8.2m to expand the existing 75% off-the-plan transfer duty rebate, which is capped at $25,000. Multi-tiered developments already under construction will be eligible for the rebate.
The state government unveiled a separate $150m housing investment package last month to help the residential building sector. The state government has, so far, committed $2.3bn to COVID-19 stimulus and relief measures, said Treasurer Ben Wyatt.
"The package will recharge our housing industry by bringing forward a pipeline of work, providing a boost to our economy and supporting jobs," he said.
Housing Minister Peter Tinley said the elements of the package are designed to provide a pipeline of work for the building sector to support it as it faces the impacts of COVID-19.
"An estimated 66,000 workers are directly employed in the residential construction sector, and many thousands more rely on the industry for their livelihoods," he said. "Protecting and supporting those jobs during this very difficult stage in the state's history is a responsibility we take very seriously."
Cath Hart, executive director for WA at the Housing Industry Association, said this stimulus package will help weather the challenges the state would likely face in the next 12 to 18 months.
"The low pipeline of construction work here means WA's residential building sector will be first hit by the impact of the national COVID-19 downturn, so the timing of today's announcement is critical," she said.
WA has already reported a 50% reduction in its construction pipeline due to the impacts of the pandemic on the sector.
"We now have a powerful kick-starter for recovery with the state's BuildingBonus and social housing packages, the federal HomeBuilder program plus efforts to slash red tape with the planning reforms announced last month," she said.
The image below shows the elements of WA's latest housing stimulus package:
Missed opportunity for critical reforms
Damian Collins, president of the Real Estate Institute of Western Australia, said the government's recent support schemes fail to address the biggest concern: stamp duty.
"While the scheme will create short-term jobs and help people get into homes in WA, the remaining 99% of West Australians who won't get to utilise the scheme, are still potentially lumbered with stamp duty if they want to buy a property," he said.
Colling argued that removing stamp duty could provide significant economic activity in the state and could help realise gains of as much as $1bn per annum.
"With Victoria and New South Wales focused on getting rid of stamp duty, there has never been a better time for WA to also consider its removal to help boost jobs and the economy," he said.
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