WA Housing crisis: Reality of more than 100,000 new homes built and approved lags behind ambitious target

The number of new homes builds and approvals in Western Australia is behind what is needed for the State to meet its share of the 1.2 million national target, two years in to a big push on housing. The construction sector says the lagging progress at the end of the second year of the five-year Housing Accord shows that governments need to put in more effort to fix the crisis. There have been 41,828 new homes built in WA since mid-2024 when the accord began. During the same period, 48,640 new dwellings were approved, falling 6.3 per cent short of what’s needed. Both measures are below the average needed for the State to hit its five-year target of 107,560 new homes. It means the pace of construction will have to pick up significantly in coming years if WA is to hit the ambitious target. But while approvals and loans granted picked up in the second year — to nearly the pace needed — the number of completions dropped back to just below the 10-year annual average, according to an analysis by Master Builders Australia WA. “The data shows that the Federal and State Governments need to do more if WA is to build enough homes for our growing population, even with a 54.7 per cent increase in new home building during the Accord era compared with the two years prior to the Accord starting,” MBA WA chief executive Matt Moran said. There was an explosion in home-building in WA during the 2010s, but since mid-2017 the number built each year fell below 18,600 This has trended upwards since mid-2022, until this year’s drop back to 19,120. The monthly average for approvals is now sitting at 2026, up from 1310 between mid-2022 and June 2024. “For five years between 2010 and 2014, new home building approvals averaged 2135 per month,” Mr Moran said. “This was due in part to low and predictable interest rates, a receptive attitude to foreign investors in Australian housing, and productivity in the building and construction industry being much better than it is today.” The Federal Government has tens of billions on the table to increase the number of homes built during the accord period. This includes up to $3 billion in bonus payments to States that hit their target number of houses before the accord period ends in mid-2029. However, the May budget papers showed that at the moment, Treasury only expects to have to pay out $714 million of this given most States are behind on their targets. The housing sector has highlighted sluggish productivity and predictable costs of building materials along with steady and stable migration numbers as among key factors to the 2010s construction boom. Treasurer Jim Chalmers last week pointed to rising construction material costs, which ticked up 5.6 per cent in the latest CPI figures, as part of the concerning broader pressures on inflation because of the fallout from the closure of the Strait of Hormuz. However, on Sunday he revealed that Treasury now expected inflation overall to peak at 4.25 per cent this year, lower than the 5 per cent forecast in the Budget six weeks ago. “There’s still a lot of uncertainty in the Middle East and elsewhere, there’s still more inflation than we would like in our economy as a consequence, but we are making more progress than we anticipated,” he told ABC’s Insiders. “We desperately need the ceasefire to stick. We can’t have another false dawn when it comes to the Middle East and particularly the Strait of Hormuz.”