The Hon. Sue Ellery MLC
Minister for Commerce
12th Floor, Dumas House 2 Havelock Street
WEST PERTH WA 6005
By email: Minister.Ellery@dpc.wa.gov.au
Dear Minister
Urgent solutions needed for housing crisis
I know that by now you may be thinking that the Home Builders Action Group [HBAG] spends its time doing little more than pestering you about the crisis in housing and the very serious financial challenges confronting many of our members.
As we have told you personally and as has been expressed in numerous letters to you and your parliamentary colleagues, there is an increasingly urgent need for broadly based but targeted support for consumers and builders.
Nicheliving https://www.nicheliving.com.au/ and the public and political pressure exerted on it to complete homes they are building for West Australian families is a typical example. Nicheliving is not alone in facing market conditions that have crippled the home building sector as a result of COVID-19 and well-intentioned but misguided stimulus policies that put enormous cost pressure on an already overheated industry.
HBAG represents approximately 200 small to medium-sized builders. Some are doing better than others but HBAG has been warning anyone who is prepared to listen that, without urgent and substantial support, the crisis in the home building industry will worsen substantially in the next six months.
There’s no point in blaming builders for increased costs, unavoidable construction delays or for building collapses that leave families with unfinished homes and inadequate insurance. The spiralling cost-of-living is now entrenched as the major issue confronting West Australian families.
A key component of the cost-of-living crisis is Housing affordability, with:
- Rising interest rates,
- Sky rocketing rents and
- Increased homelessness,
- Collapsing home builders and
- Families waiting more than three years for home to be built.
Rather than endlessly emphasising problems, HBAG has consistently identified and recommended solutions and it believes very strongly that the Government should act quickly to implement a Recover Package to:
- Help families who are having to pay rent and mortgage repayments because their homes remain unfinished. This assistance could take the form of an interest rate subsidy, or voucher scheme that compensates families for this additional cost. It should be targeted and limited to applicants who can demonstrate hardship that results directly from delays in the completion of homes;
- Complete an immediate review of the Builders Support facility to:
- Increase the size of the loan that can be borrowed. At present it is $300,000 and it should be three times that amount. The $10 million set aside for this assistance is not a drop in the ocean, especially when it takes months to get the loan;
- Increase the builders who are eligible
- Make it easier to apply and quicker to qualify; and
- Recognize that the waiting time of six months for the first loan to be made has the opposite effect to that intended. It holds up homes while the qualification process is completed.
- Assist builders with contracts that turned into loss makers due to the Governments actions must be given assistance on the basis of those contracts. That will make sure the assistance goes where it is needed and not to the wrong builders.
- Change the Home Building Contracts Act to allow builders to pass on fully justified and unavoidable cost increases. [NOTE: The government says increases are unlawful for Builders to pass onto their clients during construction BUT with its own contracts it has recognized the problem and allowed builders to pass on increases on Government jobs.] and
- Review, improve and change Trade training to produce more tradespeople quicker. It is no use the Minister crossing fingers and hoping for more skilled migrants.
Nicheliving is just the Canary in the Coal Mine – HBAG has been warning for months that many builders are experiencing severe difficulties largely provoked by Government Stimulus and Regulation and assistance to small and medium sized builders and the families for whom they build homes is now essential.
HBAG would like to meet with you to discuss these issues including any way in which it may be able to assist the Government with housing policies be framed in the months leading up to the next election.
Someone from HBAG will call your office to check your availability in the next few days.
Best wishes
Yours sincerely
Jason Janssen
CHAIRMAN
Home Builders Action group [HBAG]
jason@hbag.com.au
0412 373 404
Damien D’Ascenzo
DEPUTY CHAIRMAN
Home Builders Action group [HBAG]
damien@hbag.com.au
0403 066 028