Hot on the heels of Bob Katter’s pledge to drive down housing costs in Queensland mining towns by opening-up land, Western Australia’s new housing minister, Bill Marmion, has unveiled a similar plan aimed at providing affordable housing to accommodate the state’s growing population. From The West:
New Housing Minister Bill Marmion wants to flood the land market to drive down house prices for those struggling to buy a home.
In a renewal of his controversial comments in 2010, Mr Marmion said releasing more land was a key way to ensure cheaper houses.
His comments come less than a week after figures revealed Perth’s median house price hit a record $510,000 in the March quarter and rents continued to soar.
“Opposition Leader Mark McGowan laughed at me in Parliament (in 2010) when I said you have got to try and flood the market with more land . . . to drop the cost,” Mr Marmion said. “But that is the only solution – to have land ready to go”…
Mr Marmion pointed to State-owned LandCorp’s land releases in Broome last decade as proof the policy could help moderate prices…
“If you have a supply of land for people to buy and put a house on you can try and keep the prices down,” he said. “We have got an absolute problem in terms of affordability at the lower end.
“It is a major problem for me as the Minister for Housing.”
Obviously, I strongly support the new housing minister’s proposal. Western Australia’s population is growing at a record rate of 3.4% per annum (see below chart) and both Perth house prices and rents have been rising strongly. Any measures aimed at accomodating such strong demand growth is, therefore, very welcome.
Still, in true vested interest style, the Real Estate Institute of Western Australia (REIWA) has slammed the proposal contradictorily claiming that it would have minimal effect on the overall housing market, but then arguing that it would devalue properties in nearby areas:
Real Estate Institute of WA, which has in the past been worried big land releases would make houses worth less than they were bought for, said Mr Marmion’s comments were misplaced, especially given low interest rates.
“Housing affordability has actually improved to its best level in a decade,” executive manager of policy and research Stewart Darby said. “In Perth, the supply would be minuscule in the context of the total housing stock and would make no difference to the overall composition of the median house price until dwellings are built on that land and then sold.
“And all that would do is devalue existing properties in those neighbourhoods.”
Like Katter’s proposal, I hope the Western Australian housing minister’s plan gets up and acts as a template for the rest of Australia.
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