There may be no shortage of ideas to fix the north-west’s housing crisis, but turning plans into action has proved challenging.
SUPPORTING major housing projects, releasing old government staff houses to the market, reducing stamp duty on insurance premiums, unlocking more land, and funding villages for key workers.
These are just some of the pitches by local governments in the north-west to state and federal governments to address the region’s crippling housing crisis.
It has been a problem foreshadowed since 2018 due to the massive north-west project pipeline and exacerbated by COVID since 2020.
Direct investment in large northern housing developments is one model that has delivered results on the ground, including Karratha’s $225 million Pelago towers, Port Hedland’s $90 million Hedland 125 development, and Coral Bay’s $16.6 million seasonal staff village.
But a 2017 Labor review into special projects under the Barnett government, including the above, found several of those north-west housing endeavours lacked robust risk assessments and business cases, and were built too late.
The Pelago investment in particular – $37 million for 62 units – was seen as problematic at the time, given the government of the day’s close links to the companies behind it, and the struggle to sell those apartments when the town’s property market collapsed in 2014.
Removing or rebasing the 10 per cent stamp duty on annual insurance premiums is another measure supported by local governments, and something the Australian Competition and Consumer Commission has urged state governments to act on.
The Western Australian government has steadfastly refused to do so.
Instead, the government has stuck to its policies of funding headworks, supporting Aboriginal housing projects, and building modular social housing for low-income earners.
With a state election looming in March next year, housing will be the number one issue for north-west voters.
Opposition housing spokesperson Steve Martin is keeping the Liberal Party’s policy cards close to his chest, while The Nationals WA leader Shane Love has provided some insight into how he would address housing matters in the north.
City of Karratha Mayor Daniel Scott’s recent commentary reflects the feeling of most north-west local government leaders at present.
“We need the state to get their A into G and develop some land,” Mr Scott told the Developing Northern Australia conference in August.
“Stamp duty on insurance and property transfers ... is an easy lever the state government can pull.
“[The state is] directly competing with our mums and dads in our local community, and they [government] have a budget [and] can pay whatever the market demands.
“What we want the state to do is sell their forty-year-old houses … to create … a first homebuyer market, build new houses for their employees. And if they don’t want to own them, then commit to long-term leasing agreements.”
Housing Minister John Carey is the man with the mammoth task of solving the north’s most pressing problem.
He was not available for interview.
However, Mr Carey’s office and those of Treasurer Rita Saffioti and Finance Minister Sue Ellery provided Business News with comprehensive responses to questioning.
They were adamant the government’s ‘A’ was most certainly in ‘G’.
“The state government is acutely aware of the housing market across the country, and we are continuing to deliver major investments through our record $3.2 billion investment in housing and homelessness measures,” a state government spokesperson said.
“Across the north-west region, which includes the Mid West-Gascoyne, Pilbara and Kimberley regions, since our record investment more than 325 social homes have been added, with a further eighty currently under contract or construction.
“Across the north-west region more than 2,920 social housing dwellings have undergone maintenance or refurbishments to extend their useful life and to ensure they remain fit-for-purpose.”
Property wins
In Roebourne, a housing project that could prove life-changing for the town’s Indigenous residents is almost finished.
Last November, the state government put forward $10.5 million to help Yindjibarndi Aboriginal Corporation build a nine-unit transitional housing estate in the town.
Residents of the facility will be supported with employment, education, finance and health programs with a view to help them into homes of their own.
The $200 million North West Aboriginal Housing Fund was the vehicle behind that grant.
“The state government’s North-West Aboriginal Housing Fund is a $200 million initiative that aims to create pathways to social and economic independence and wellbeing for Aboriginal people in the Pilbara and Kimberley regions,” a government spokesperson said.
Housing construction on the Exmouth Marina. Photo: Tom Zaunmayr.
The fund has: delivered transitional homes in the Kimberley; put $17.8 million into a 40-home project in Port Hedland; spent $9.7 million to help Nyamba Buru Yawuru provide affordable rentals in Broome; and offered $794,000 to Robe River Kuruma Aboriginal Corporation’s plan to help low-income families into home ownership and private rentals.
A further $3.1 million has gone to the Yura Yungi employee accommodation project in Halls Creek to help upskill and attract Aboriginal health workers to town.
Other measures under the fund include help for Aboriginal people to buy a home from the Department of Communities, a Pilbara affordable housing program to deliver 28 rentals (which may ultimately be purchased), and support for Aboriginal Community Controlled Organisations to build, refurbish, or buy homes for employees.
By comparison, the federal government’s support for housing in the north-west has been scant.
A $98,000 grant to the Shire of Broome to help it work with owners of undeveloped and underdeveloped land through a new planning arrangement is the only measure of note this year.
Projects delivering nearly 3,000 homes to WA have been shortlisted under the federal government’s first round of the $10 billion Housing Australia Future Fund.
While the location of those homes won’t be revealed until the end of 2024 or early 2025, Business News understands at least two projects in the north-west were put forward for consideration.
In February, the federal government expanded the Northern Australia Infrastructure Facility’s remit into social housing and encouraged developers of such projects to apply.
At this stage, no housing projects have been funded through NAIF.
In Exmouth, medium- and high-density residential developments are having more luck on the marina.
This was led by Celsius Property Group and Fowler Group which built 24 units for PHI Aviation in September last year.
Fowler and Celsius have now been handed Superlot D – the last large lot on the marina – to develop.
A six-lot grouped dwelling on the marina has secured approvals, too.
To date, the RAC-funded $15 million Coral Bay village is the only key worker development with state government-funded headworks completed in the north-west since 2017.
In Denham, the shire is close to finishing a 12-unit independent living complex for its senior citizens.
A sod turning was held for Azzurra Investments’ $51-million apartment in South Hedland in November last year, though the build is yet to substantially progress.
With population forecasts based on approved projects set to leave a 2,000-bed residential shortfall by 2040 in Karratha alone, the need for property investment is more pressing than ever.
“The reason those companies want to locate staff [in Karratha], we understand, relates to the desire to have supervisory staff and high-end technical staff on the ground close to investments,” Pilbara Development Commission chief executive Simon Taylor said.
“Developing land is expensive … and if you are an individual purchaser, you face quite high insurance costs, as well as some challenges getting access to finance.
“We are doing some work at the commission to better understand what the opportunities are from increasing housing supply in the region.”
Question marks
In Carnarvon, a proposed four-storey residential and hotel project with 35 apartments and up to 113 hotel rooms – The Pier – on the fascine is in the works by private developer DG Corp.
The build is backed by the Di Latte family, perhaps best known for the collapse of Diploma Group in 2016, and ongoing legal wrangling over alleged unpaid fees to subcontractors.
The Fremantle office DG Corp is registered to appears empty and the company has not returned numerous calls or emails from Business News.
The state government sold them the land and the Shire of Carnarvon approved development in April 2023. Expressions of interest to live at The Pier opened this year.
Yet to bear fruit is the state government’s Infrastructure Development Fund, which has funded nearly $23 million worth of headworks in regional WA since September last year.
It is a welcome initiative, but no project supported by that fund has broken ground in the north.
The empty seaside block where DG Corp's apartment and hotel project is supposed to be built. Photo: Tom Zaunmayr.
In Broome, plans for a workers’ village at the Sanctuary Road caravan park are sitting on the table one year after the headworks fund put $7.68 million into the project.
It’s a similar story in Port Hedland, where a 75-unit key worker build attracted $4.5 million from the fund in March.
In September, the Town of Port Hedland rejected tenders for the build because they came in above the $40 million the town had hoped to spend.
Both councils noted at the time the state financing was not enough to make the builds happen.
The opposition’s housing spokesperson, Mr Martin, said the $40 million allocated to regional key worker housing under the Infrastructure Development Fund was too thinly spread.
“In areas where there is market failure and you can’t get private investment … government investment is needed to get projects off the ground,” he said.
“Leaning on small local governments to do the heavy lifting for them in this space is not acceptable.”
Mr Martin said a strong economy, too much COVID stimulus, population growth, expensive rents, materials shortages, and Metronet hoovering up construction workers had created a perfect storm.
A state government spokesperson said the development fund addressed significant upfront costs with connecting essential services, which were a barrier to housing in regional WA.
Projects delivering more than 720 units for key workers have been supported under the fund.
“The government has also funded a range of initiatives to boost the state’s construction workforce and accelerate construction of new homes,” a government spokesperson said.
Past performance
As Nationals WA and opposition leader, Mr Love is adamant the Barnett government’s Royalties for Regions-funded housing program had proved its merits in the north-west.
Those direct investments resulted in seven key workers’ villages being built as well as the twin Pelago towers in Karratha.
Much of the investment in these facilities was described in John Langoulant’s 2017 special projects inquiry as presenting substandard business cases in a ‘kneejerk reaction’ to housing shortages of the day.
“We were absolutely pilloried by the Labor Party for putting those apartments in place and yet, if you look at the tenancy of many of them, I think the vast majority are actually tenanted out by government,” Mr Love said.
“In all the visions of hindsight that you would look at them now, you would say we got them all very right.
“The value of the investments that we made in the Pelago development, etcetera, those types of direct investments by government are also things which should be being looked at.”
Some of these projects appeared poorly timed when they were finished as the region’s housing market collapsed in the mid-2010s, but today they are fully occupied and essential to the functioning of their respective towns.
But many Barnett-era ideas never saw the light of day.
The West End of Port Hedland is littered with fading signs spruiking lofty apartment and hotel developments from the glory days of the noughties boom that never transpired.
Look carefully and you can find sun-damaged billboards hinting at estates and projects in Roebourne, Broome, Karratha, Carnarvon, Newman and Kununurra: none of which progressed.
GROHing pains
One third of Broome’s rental market is subsumed by government regional officer housing (GROH), according to a 2023 Kimberley Development Commission report.
It is a similar story in Karratha, where 30 per cent of private rentals – 355 dwellings – are leased by the state government.
By comparison, the state owns 149 homes outright in town, according to the City of Karratha.
GROH’s heavy competition in the private rental market is a major problem in north-west towns.
Karratha's Pelago apartments have a large proportion of GROH properties. Photo: Tom Zaunmayr.
Essentially, the argument goes, it is actions by the state government that are pricing residents out of the market.
Mr Love said state government agencies were among the worst offenders in contributing to the north-west’s housing shortage.
“If you look at a community like Denham, there is a large number of people who are employed by the Department of Biodiversity, Conservation and Attractions … and the numbers of houses tied up for government employees there really is putting a stress on the housing stock,” he said.
“Having more housing built by government – either in partnership or in some sort of investment framework with private investors or local governments – would start to rebuild some of the housing stock in communities.
“Although real estate house prices are generally rising throughout the state, they don’t really account for the cost of building a house in the north.
“And so having government assist by putting their own homes up and then recycling or moving out of private arrangements they might have will greatly assist.”
The housing crisis has been the biggest contributor to workforce shortages in the north-west.
Dozens of local and major company bosses have told Business News prospective employees were unable to find housing or had rejected offers after hearing how bad the situation was in the region.
However, even the government is finding it hard to get adequate housing, hence leaning on the rental market to find houses for police, nurses, teachers and the many other professions it employs.
Business News has heard of young government workers being shuffled between hotel rooms for weeks and agencies searching for months to find appropriate lodgings to relocate staff.
“I have heard from the south coast to the far north, where teachers have been living in caravans or at the local pub because there’s just not enough housing,” the Liberal Party’s Mr Martin said.
“We absolutely need all those teachers to fill those classrooms, we need enough police on the beat in regional towns, and we need housing for nurses.
“It is simple and obvious to say, but you build your way out of a housing crisis.”
The data makes clear why the government housing program is under such strain.
Under the final two years of the former government and first term of the current state government, WA’s GROH portfolio was reduced by about 10 per cent, from 5,516 homes to 4,943 homes.
Since 2020, that number has recovered to 5,339 properties owned or leased.
About 92 per cent of properties cut from the GROH program between 2015 and 2020 were government-owned homes.
“What we witnessed, due to the mismanagement of state finances by the previous Liberal-National government, was the sell off of millions of dollars of GROH stock to accrue back more than $180 million of debt,” a state government spokesperson said.
“Since our record investment, we’ve also added more than 165 GROH properties in the north-west region, with a further twenty-five currently under contract or construction.
“The state government is investing $160.3 million in GROH for new builds, spot purchases, refurbishment and land acquisition.”
Private spend
Getting developers and owner-builders to dip into their pockets has long been a significant barrier to housing provision in the north-west.
Banks are wary of loaning money on anything less than a 20 per cent deposit, job contracts don’t give residents long-term certainty, insurance premiums are among the most prohibitive in the country, and build prices mean many projects are worth less than they cost when they are finished.
The City of Karratha and Shire of Broome are at the forefront of tackling these issues.
In Broome, the shire is reaching out to owners of un- and underdeveloped land to get a read on what is holding them back, inform them of what they can do with their land, and to understand what policy settings are needed to spur development.
WA-based multinational Perdaman has engaged Timik Developments to build 85 homes in Karratha, and Thomas Building has worked with Yara and Woodside Energy on homes in town.
Karratha’s council is weighing up developer proposals for gifted land, build-to-own models, joint ventures, communes, modular housing and debt financing to spur medium- and high-density developments under a program named Project Dorothy. Karratha also has the 82-unit Walgu apartments project.
State government agencies have expressed interest in about 75 per cent of those units, according to the city, yet the government has refused to contribute to the build cost beyond funding headworks.
The city has now turned to the federal government for support.
A state government spokesperson said a commitment to lease apartments for GROH would enable the project to proceed.
Among the promising developments in Karratha are a 46-townhouse development application in Jingarri, the eight shortlisted ideas under Project Dorothy, which could yield 172 houses, and potential for the city to take the lead on the 1,265-lot Mulataga estate.
“Unless we get a housing program rolled out where every year we’ve got, say, fifty houses getting built, then businesses in town are going to have to continue to either rent houses, own houses, or subsidise rent for their employee base,” Karratha Mayor Daniel Scott said.
“You have some people right now who are working in town [where] there are four of them living in one bedroom, just so they are not chewing out their weekly income on rent.
“Like industry, government needs their people here and they will just rent on the market, and they will pay whatever the market dictates, sucking out of our housing market if they continue down the same model they have now.”
All local governments in the north-west point to insurance premiums – which the ACCC has urged the state government to abolish or rebase stamp duty on – as a key hurdle to investment.
Mr Love said insurance premium taxes were on his party’s radar for the upcoming state election.
He said more than 20 per cent of the cost of premiums was due to GST, stamp duty, and GST on stamp duty.
Abolishing property stamp duty for all first homebuyers has already been committed to by the Nationals.
Mr Love has also suggested state and federal governments need to adjust their own lending instruments.
Mr Martin would not be drawn on insurance premiums but has committed to lifting the first homeowner exemption for stamp duty by $100,000.
He said the Liberals were looking at structural reform to the state’s economic base.
However, the state government believes tweaks to insurance taxes won’t deliver much relief.
“Insurance duty is a small component of the premium value, representing ten per cent of the total cost,” a state government spokesperson said.
“Any reform to insurance duty will not address the underlying factors to the high cost of insurance premiums in northern Australia.
“Further policy matters regarding regional housing, lands and homelessness initiatives will be considered in future budget deliberations.”
Business News is aware of home insurance premiums ranging from $4,000 to $25,000 in the north-west; 10 per cent relief on that would put between $400 and $2,500 back in a homeowner’s pocket.
Insurance duties raised $21 million last financial year for the state government.
Empty blocks
Land release is another sore point.
“We need a rapid land release to happen,” Shire of Exmouth president Matt Niikkula said.
“We have a lot of government departments moving into town … but state and federal government have not built any houses for a long time.
“They have moved to a renting option and, unfortunately, they are the only ones able to pay those exorbitant rents.
“Every local business in town is struggling to find affordable rent or affordable accommodation for their workforce.”
Blocks like this one in Town Beach, Broome, are being sought for development. Photo: Tom Zaunmayr.
Earlier this year, the state government released a 40-lot subdivision at Waranyjarri Estate in Broome, a 174-lot estate in Karratha, and (after the interview with Mr Niikkula) a 150-lot marina release in Exmouth.
About $5 million has been put towards the 26-lot stage 13 of Waranyjarri Estate, and $13 million for 50 more lots in Madigan Estate and Baynton West, Karratha.
“At the moment, there are very few, if any, private land developers actively operating in the north-west,” a state government spokesperson said.
“As part of the 2024-25 state budget, the state government announced almost thirty-five million dollars had been allocated to supply more development-ready land for housing in the Kimberley, Karratha and Goldfields.
“The extension of Tanami Drive, a critical road connection between Broome North and Cable Beach, will also be delivered through the funding.
“This road extension will provide important access to around 500 future residential lots and reduce the travel distance for residents to Cable Beach from Broome North.”
Landholders in the north-west have told Business News lengthy approvals processes meant they were wary of sinking money into developing their sites.
There is always great concern in the north that, by the time five years pass – the time several owners say it takes to get land ready – the economic outlook may be very different to what it is today.
Mr Martin calls it the “hidden story” of the housing crisis.
“I think we are planning without a plan at the moment,” he said. “What they should have been doing five years ago around land release, they didn’t do, and now we are seeing the fruit of that lack of action.”
To date, Labor’s land booster program has delivered more than 770 lots in 83 regional towns at a value of more than $180 million.
The Nationals have proposed a $1 billion, 10-year investment fund to tackle headworks and deliver a rolling stock of regional land supply.
The Liberal Party is yet to reveal its ideas to address the matter.
“I would hope we can rebuild some confidence in the building sector,” Mr Martin said.
“I am a fan of more people coming to WA, particularly in the regions where we badly need them.
“But this is happening at a time when we can’t provide enough houses for the people that are here.
“The only thing that stopped this or slowed this down when it happened last in 2014-15 was when the iron ore price tanked.
“I hope that doesn’t happen. This state depends heavily on the iron ore price, so we do need to build through this, but it will take some time.”
The message from the north-west is simple: hurry up and trust us.
“Everyone’s known we’ve needed these houses, but by the time that slow wheel of government turns around we are playing catch up … just like the last boom,” Mr Scott said.
“Everyone in northern Australia already knows how to get things done … so if the government wants to help each region get their housing needs solved, just pick up the phone and ask.”
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