Steve Martin: Endless building company collapses show need for reform

The great Australian dream, so endearingly portrayed in the 1997 film The Castle — of building, owning, and living in your own home — is becoming a nightmare for an increasing number of West Australian families.

Some will be avoiding that heartwarming Australian classic right now — every repeat of the phrase “a man’s home is his castle” making them wince. That’s because so many are trapped in a horror scenario; that you can do everything right, for years, and still not end up with the home you’ve been working towards.

Years of tight budgeting to save for a deposit, selecting a design and choosing a suburb to put down long-term roots in all represent significant milestones, and for most people are the biggest personal investment decision they’ll ever make.

Housing problems exist across the spectrum — in rentals, owner-occupied homes with mortgages, and in government-provided social housing for the more vulnerable.

Homelessness remains a significant problem, as outlined in our recent report tabled in State Parliament.

Residential building approvals are down. In May, total dwelling units approved decreased by 11.1 per cent.

A balanced rental market has a vacancy rate somewhere between 2.5 and 3.5 per cent. Perth’s rate is 0.7 per cent and in parts of regional WA rentals are even harder to find.

There are 34,201 people on the social housing waitlist and 19,195 applications. The total number of new builds the State Government is planning over the forward estimates is 4000, and the current average wait time for social housing is 129 weeks (about 2.5 years).

A perfect storm of government stimulus, COVID-induced labour shortages, supply chain delays, rapidly rising interest rates and inflationary pressures on the cost of building has created a significant heartache for aspirational home builders and the building sector.

Too many home buyers over the past few years have experienced their dreams turning sour. The recent closure of boutique construction firm City Residence is yet another example.

How many builders need to fail before the WA Government commits to the necessary long-term industry reform?

Beyond the immediate crisis — the increasing number of builders closing their doors, suspending new business or shutting down permanently — there are concerns about the long-term capacity of the industry to deliver the necessary supply to meet WA’s long-term demand.

If we want to get West Aussies into homes, we need to create an environment in WA’s residential building industry which protects consumers by fostering a thriving and competitive local builder market.

A robust building industry motivates builders to offer quality homes at competitive prices, drive innovation and introduce new features, better designs, and improved construction techniques.

A competitive market also promotes accountability and quality control. Builders strive to maintain their reputation and satisfy customers, resulting in improved construction standards, adherence to building codes, and better overall quality in the industry.

The current swathe of closures emphasizes the need for action from the WA Government to address the underlying long-term issues contributing to this crisis.

Implementing measures such as stamp duty and payroll tax reforms, streamlining regulatory processes, securing supply chains, and resourcing the workforce are critical to revitalize the industry.

Forward thinking is required here. Proactive steps need to be taken to stop the long-term erosion of the home builder market in WA, and to leverage the incredible opportunities in our State.

In a market rocked by pressures on all sides, some policy ambition from the Government — to empower the industry to do what it does best — is sorely needed.

Until then, many West Australians will continue battling far too hard to get their castle.