Episode #203
Ep 203 - We Need 40,000 Homes. WA Can Only Build 24,000.
The Housing Industry Forecasting Group met this week, and the number came back at 24,000 homes a year. To take real pressure out of the WA market, we would need closer to 40,000. Michael McGowan joins Neil in the studio for a third time to unpack where the Western Australian housing market actually sits right now, past the East Coast media noise. Since the last catch up we have had three interest rate rises, the war in Iran, material supply pressure and federal government changes that have pulled confidence out of key parts of the market. Yet production on site has held up, and nobody has seen a builder on the front page of the paper. In this episode: Why 24,000 homes a year is the realistic ceiling, and the three constraints holding it there: land, workforce and infrastructure capacity from Western Power and Water Corp Construction costs still rising 7 to 8 percent annually, with roughly 4 to 5 percent of recent increases traced back to transport and petroleum-linked materials Build times sitting around 10 months, why the northwest corridor builds faster than the east, and what has to change to get back to seven or eight The Brabham land story. A 375sqm block bought for $185,000 three years ago, the same size block in an inferior location now at $475,000, and buyers given 48 hours to decide Why land supply is so tight: fragmented ownership, market gardens with unknown history, soil that is not the traditional Class A sand, and environmental approvals that can cost you a full 12 months if the fauna study misses The R20 average lot size reform. Around 50,000 lots potentially becoming subdividable, out for public consultation in October, with a 1 July 2027 start if approved The rest of the proposed package: single dwellings out of planning even when not deemed to comply, three storey in R40, and dwellings up to four going straight to building permit Why state policy does not always survive contact with local government. Neil shares the granny flat build permits that got pushed back into planning, and Michael explains what HIA are doing with WALGA across 139 local governments The double brick to brick veneer transition, the $5m matched housing innovation fund loans, and why most major Perth builders are now working on two or three build methodologies at once Renovation activity as the hidden pressure. Four types of renovator all pulling on the same specialised trade base without adding a single dwelling to the market Skilled migration running at around a thousand a year, the growing Filipino trade base in WA, and builders buying and building housing to become landlords for their own workforce Investors leaving the market on the back of negative gearing and CGT changes, listings jumping from 3,000 to 6,000, and why new builds sit outside the proposed changes Victoria as the contrast. Blocks sitting 40 to 50 days, builders quoting six months from slab down, and a state government that has taken the wind out of retail confidence Ten train stations earmarked for a faster planning pathway, and why unlocking high density is the only thing that moves the national numbers Crystal ball. Steady rather than shrinking, 24,000 for the next three to five years, with two asterisks: Trump, and Brisbane 2032 poaching our trades Michael's view is that it is not doomsday. The oven has come down from 240 degrees to about 200. The market is still positive, still undersupplied, and still one of the most attractive in the country. Free access to the Coliving Cashflow Academy Neil is opening up the Academy in exchange for your feedback. Complete the sentiment survey, which takes three to five minutes and can be done anonymously, and you will get access to all 13 modules covering goal setting, HMOs, coliving, rent to rent, subdivisions, renovations, new builds, property management and fire safety. Take the survey here: https://form.jotform.com/262147921124048 Full show notes and links available at thehmopropertyco.com THE COLIVING CASHFLOW ACADEMY The lessons are in the doing. The Academy is where you learn how to do it properly, so your first deal isn't a $200k lesson. Enrol now at $4,995. Price moves to $5,995 from 1 August when live group calls start. www.thehmopropertyco.com/coliving-foundations/ If you're serious about building wealth through property and want to see what's actually possible, this episode is a must-listen. Subscribe and turn on notifications so you never miss an episode! Want help with your investment strategy? Book a free, no-obligation chat with our team: Calendly – 15 min call Join our community: Perth HMO and High Cashflow Investment Properties Facebook Group Connect with The HMO Property Co: Website: www.thehmopropertyco.com Instagram: @the_hmo_property_co Facebook: The HMO Property Co LinkedIn: The HMO Property Co ▶️ YouTube: The HMO Property Co TikTok: @thehmopropertyco_ ️ Spotify: The HMO Property Show Apple Podcasts: The HMO Property Show ️ Living Rooms: livingrooms.com.au Disclaimer: Nothing on this channel should be considered tax, financial, investment, or any kind of advice. 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