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WA Property Market Update May 2024 – State Budget Edition

Each month when we deliver our WA Property Market Update, we tend to focus on the state of play in the residential and commercial sectors, but in this May 2024 edition we’ll be taking a look at the recent State Budget. The WA State Budget was handed down by the Cook Government on 9 May 2024, with a few interesting inclusions that impact the property landscape in WA. There are several measures contained within it that aim to address ongoing housing supply issues and affordability concerns, including increased funding for social housing and the first homeowners rate of duty exemption. So, what’s in the budget from a housing perspective, and what impact might those measures have on the property landscape?

WA Property Market May 2024 – First Home Buyers

For first home buyers, the stamp duty exemption threshold will increase from $430,000 to $450,000, and concessions will be applied on a purchase up to $600,000, up from $530,000. It is interesting (and a little disappointing) to note that while the increases are welcome, they have not been put up to a level that aligns with rising house values across the board. While property prices rise and cost of living pressures continue to bite, there will likely be increased competition for homes that fall within the price range applicable to this rate of duty exemption, but those able to take advantage will enjoy some serious savings.

WA Property Market May 2024 – Rental Properties

The struggling WA rental market has also been considered by the State Government in the budget, with the Vacant Rental Property Scheme being launched. The aim of this incentive is to get more rental properties onto the market and address the critical undersupply of properties available. Subject to eligibility criteria, property owners can access a one-off payment of $5,000 to bring the home onto the rental market. To qualify for the payment, the property must have been vacant for at least 6 months, be self-contained (not a granny flat, spare room etc.), and has not been used to receive a payment under the Short-Term Rental Accommodation (STRA) Initiative Scheme.

With a median rental price per week of $600 for units and $650 for houses, any incentive to bring more properties to market to meet demand is positive, however it remains to be seen just how big an impact this particular measure will really have.

WA Property Market May 2024 – Construction Industry

One of the key challenges faced by the property market in WA is the bottleneck in building new homes. Many homebuilders have gone out of business, and those that are still operating are doing so on extended timelines, the likes of which we’ve never seen before. Contributing to this is a labour shortage, where too few skilled workers are available for construction projects. The State Government announced in their 2024-25 budget $85 million to “boost the capacity of the residential construction workforce”. This includes:

• $21 million for an additional 150 places to subsidise new apprentice and trainee wages for Group Training Organisations,
• $37 million to provide incentives to complete apprenticeships, including tool allowances and milestone payments, and
• $4 million to continue the Construction Migration Office to attract skilled migrants.

As with the other Budget measures intended to address housing shortages and affordability, we will only understand its real impact further down the track.

Looking Ahead

As with any budget, not everyone will be able to benefit from each measure being introduced. Many first homeowners will be able to benefit from the extension to the rate of duty exemption, while others may take the opportunity to list a vacant property on the rental market and enjoy a quick injection of cash in the process.

If you’re in the market to buy a home or refinance an existing loan (particularly with many fixed-rate loan periods ending soon), the MP+ Finance team can assist. Please don’t hesitate to reach out on 08 9325 2411 (Perth), 08 9301 2200 (Joondalup), or contact us via our website.

written by:

Paul Moran

Paul has over 35 years of experience in finding financial solutions for homebuyers, investors and business owners.
A licensed broker and member of the Mortgage & Finance Association of Australia (MFAA), Paul’s extensive experience includes 20 years with a major bank, seven of which were as commercial banking manager.
Paul delivers a holistic financial solutions to achieve the best possible outcome for a client’s personal or commercial lending needs. Paul also provides a comprehensive financial consultancy to business owners on commercial, equipment and invoice finance.