WA builders have been thrown a $300,000 interest-free loan as the state government attempts to tackle the mammoth backlog of “stranded” residential home builds.
The new 10 million dollar loan facility announced by state officials last Thursday will inject a much-needed cashflow into the bank accounts of struggling buildings that have stalled construction on homes over the last two years.
To secure up to $300,000 or $60,000 per property, applicants will have been a registered builder before 2020, have one or more homes incomplete since January 2022 and be willing to hand over their financial statements.
The initiative is a direct result of a roundtable held between the State Government, HIA WA, and the housing and construction industry late last year about boosting housing supply and affordability in the state.
The Cook government hopes the loan scheme will help turn the tide for builders doing it tough and prevent further insolvencies sweeping through the state’s building sector in the new year.
Treasurer Rita Saffioti says the scheme will ultimately help secure the housing pipeline for buyers and offer some reprieve for a construction sector staring down the barrel of a gun.
“We know that the construction industry has experienced significant labour and material price hikes over the last few years,” she said in a statement provided to Build-it.
“This has delayed some residential builders from completing homes as the cost has increased significantly.
“We have also seen many families building new homes left stranded with incomplete projects and no timeline for delivery.
“Providing secure housing to Western Australians, boosting housing supply, and supporting a sustainable building industry are among the top priorities of the Cook Government.”
According to Russ Stephens, co-founder of the Association of Professional Builders (APB), the rising costs of labour and materials caused 80 per cent of builders in Australia to “lose money” in 2023.
According to the latest figures from the Australian Bureau of Statistics (ABS), there were over 25,000 homes still under construction in Western Australia in 2022/23.
Saffiotti said she was confident the scheme would not result in a further spike in demand.
“At the time display homes were shut, there was a feeling across the nation that the housing industry would collapse and thousands of West Australians would lose their jobs, but as a result of keeping COVID at bay that didn’t happen,” she told reporters.
“So sometimes it’s easy to look back in hindsight and say this should have happened or this shouldn’t have happened, but at the time the intention of both the federal and state governments was to help support the housing industry, and we couldn’t have predicted things like the Russia-Ukraine incident.”
Housing Industry Association WA executive director Michael McGowan said he believed the approach was a measured one.
“I think what we’ve learned from the last couple of years is we can’t have an unlimited amount of money that goes into the pool and the inflationary pressure that that drives,” he said.
Builders are encouraged to register early for the facility, which will be available on a “first come, first served” basis to eligible applicants.
