Media

OPINION: HOUSING ALSO A PROBLEM FOR 'WAIT AWHILE' STATE, WEDNESDAY, 7 JUNE, 2017

June 07, 2017

DR ANNE ALY MP

FEDERAL MEMBER FOR COWAN

 

HOUSING ALSO A PROBLEM FOR 'WAIT AWHILE' STATE

 

Western Australia is often called the “Wait Awhile” State.

For those in other States, it refers to our relaxed attitude towards national trends such as daylight saving and shopping hours.

But increasingly for West Australians, it speaks to the undeniable fact that we are left out of national policy discussions and have to wait for them to become relevant to us.

And if there’s a national conversation that shows some of the starkest differences between the west and east coast — other than the GST — it is housing affordability.

Housing affordability is the water cooler discussion du jour with the conversation ranging from first-homebuyers who like a bit of smashed avocado, to the median price that is out of reach for most (not just first) homebuyers. But the one thing that stands out is the absence of any consideration of just how different the issue is for West Australians.

There’s a lot of information out there on how to tackle the housing affordability crisis, although the analysis and opinions focus largely on the nature and scale of the issue in Sydney and Melbourne.

What about WA? How can a national strategy to tackle housing affordability incorporate the specific conditions facing us?

On the back of a mining and construction boom, WA had inflated rental and housing prices, making housing affordability one of the key issues for our State — similar to what the Eastern States are now dealing with.

The price bloat saw house prices skyrocket and homes in mining towns were being rented out at exorbitant prices out of reach for low and average wage earners. (Remember that ramshackle three-bedroom, one-bathroom home in the Pilbara being rented out for $3500 a week?)

However, according to the some in the industry, housing affordability is now an exclusively Eastern States issue.

Perth property prices have plummeted on the back of the downturn in the mining construction boom and first-homebuyers in Perth are buoyed by low interest rates and favourable purchasing conditions. But that’s not the whole story.

Falling housing prices means lower equity for many people who purchased homes during the boom time.

Lower equity in their homes means that those people either can’t or are more reluctant to sell their homes to see them through the hard times — like unemployment.

There are so many families doing it tough who are now faced with having to sell their homes because they can no longer afford to pay their mortgages. But with little or no equity left in their homes to cover their debts or even get them into a rental property, they are stuck.

Since the end of the boom, the Consumer Credit Legal Service of WA has been inundated with homeowners who are facing mortgage stress — and it’s not just people with a property portfolio worth close to nothing. It’s middle-income earners with no investment properties who face the very real prospect of losing their family home.

There’s a cautionary lesson here for the Federal Government in coming up with a national strategy on housing affordability.

The Government would be wise to look to WA for an analysis of what is likely to happen once the market collapses (and it most certainly will) in the Eastern States.

It’s not just a matter of first-homebuyers being able to afford homes. It’s also a picture of what happens when the property market collapses combined with higher levels of unemployment, an ailing State economy and uncertainty in the job market.

A comprehensive and effective housing affordability policy needs to look at the entire gamut of the issue — from rental affordability to housing affordability to mortgage stress. That is the real challenge here.

The “Wait Awhile” State is more often than not left out of the equation when it comes to national conversations — whether in regard to GST distribution or housing affordability.

It’s time this changed and the Government paid attention to our experience, or east coast families could be in for a very tough ride.

 

This piece was first published in The West Australian on Wednesday, 7 June, 2017.