Invest in land infrastructure, Barnett urged

Developer Cedar Woods has called for greater state government investment in basic infrastructure to avoid projected shortfalls in new housing stock and sharp rises in property prices in the next nine years.

The Housing Industry Association’s Housing to 2020 report predicted Western Australia would be grappling with a shortage of 112,000 dwellings by 2020 if building rates continued at the average rate of the past 20 years.

A shortfall of this magnitude would exert significant upward pressure on property prices and reduce affordability.

It takes up to 10 years for WA developers to progress from the acquisition of land to the point where they can take their lots to market and the development of infrastructure is often a major hurdle.

Cedar Woods state manager Stuart Duplock said the development of sewage treatment plants, transport and water infrastructure was hampering the timely development of residential land parcels in Perth and the regions.

In May, Cedar Woods bought a development site in Baldivis which requires the construction of the East Rockingham Waste Water treatment plant for its lots to be sold.

Cedar Woods expected the plant to be developed by 2015, however, Mr Duplock said the facility had been on the drawing board for nearly a decade.

“We bought it on the basis that there would probably be a four to five-year delay for those lots to be serviced but a lot of people bought in that area five years ago expecting the infrastructure would be there this year,” Mr Duplock said.

Infrastructure was costly to roll out and it was complex to secure all the approvals but Mr Duplock said it was a major brake on the development of residential housing lots.

However, it’s just one factor affecting the construction pipeline for new housing in WA along with the time taken to secure environmental approvals, local government approvals and the impact of stamp duty on demand.

The WA arm of the Urban Development Institute of Australia is sharpening its focus on stamp duty, which it claims is one of the most serious impediments to new home sales.

“We haven’t pushed that hard on it previously but we are now starting to raise the issue more firmly because … we are finding it’s a barrier to sales,” UDIA WA chief executive Debra Goostrey said.

Ms Goostrey said the trend towards higher density and smaller lots had affected structural change in the development sector and the state’s taxation regime needed to reflect this shift.