Builder crackdown to stop cash-strapped builders leaving homebuyers in limbo as WA approvals drop by 7.5pc

Housing approvals dropped in WA in May although they’re significantly up on a year earlier – but the State still looks likely to fall short of building enough houses to win it extra cash from the Federal Government. The Commonwealth has put bonus funding on the table for States that meet their share of the 1.2 million new homes five-year housing accord target. Nationally, building approvals grew by 3.2 per cent in May, but this was mainly driven by strong growth in Victoria and NSW, new data from the Australian Bureau of Statistics showed. Approvals in WA dropped 7.5 per cent from a month earlier. Federal Housing Minister Clare O’Neil saw green shoots in the data, with her office saying momentum was building nationally towards the targets. But shadow minister Andrew Bragg said the improvement was “marginal”. The Property Council estimates WA will fall about 9.4 per cent short of its target to build about 129,700 new homes by mid-2029 if current building trends continue. Separate forecasts from the Master Builders show WA will be 3.4 per cent shy of its target – although this would drop to about 12 per cent below if building approval rates don’t pick up. Master Builders WA chief executive Matt Pollock said the State was among the closest in the country to meeting its housing target. But a hurdle is Perth’s long cultural and lifestyle attachment to lower-density living, with apartments and townhouses playing little role in the city’s development. “If we’re going to meet demand on housing supply with the fastest growing population of any state and also an economy that’s firing pretty close to on-all-cylinders, then we do need a higher and medium density construction … to make up a greater part of new developments moving forward,” he said. Property Council WA chief executive Nicola Brischetto said approvals too often didn’t translate into building actually starting, so the data tended to be a bit volatile. The biggest barriers are the availability of builders, cost of construction, and the economic viability of many apartment projects. Ms Brischetto commended the WA Government for having concentrated heavily on easing workforce shortages but said now there also needed to be a focus on boosting productivity, through using more pre-fabricated and modular construction or adopting AI for scheduling and ordering. Meanwhile, Tony Buti has put dodgy or cash-strapped builders on notice, with a review ordered into the State’s building contract laws to stop homebuyers being left in limbo. The Minister for Commerce has vowed to empower the Building Services Board and the Building Commission that were unable to stop the collapse of NicheLiving that left more than 200 homes unfinished and taxpayers on the hook for $40 million. NicheLiving’s directors voluntarily gave up their building registration for a decade, in return for the State Government waiving its insurance liability. But Mr Buti said it was the April collapse of another builder, Inspired Homes, that convinced him to intervene. “On the day I was sworn in as Commerce Minister, I had a meeting with the Premier and a group of Inspired Home hope-to-be owners and that was what really triggered the need for these changes,” he said. “We could not compel Inspired Homes to hand over any financial records.” Mr Buti is aiming to introduce legislation this year, to compel builders to open their books, and impose conditions or cancel registrations if a company can’t prove it is solvent. It’s unclear what penalties will apply if builders don’t comply. “The building industry generally is a very sound industry,” Mr Buti said. “The majority of builders that are building quality homes, they are sustainable. We just want to ensure that those that aren’t are not in the system.” He also announced a broader 12-month review of the system, to be led by Parliamentary Secretary Dan Caddy, aiming to restore public confidence in the State’s home building industry. Home owners, the building industry and other stakeholders are being urged to have their say, with Mr Buti promising a “balanced” approach that won’t increase red tape. Housing Industry Association executive director Michael McGowan welcomed the overhaul and admitted the industry’s reputation had been battered by recent scandals. “Nobody wants to see builders on the front page of the paper and this is seen as a positive way forward,” he said. “I think 99 per cent of the building industry should have nothing to worry about. The measures that have been outlined today are for those that aren’t able to meet their financial obligations and are in a serious amount of trouble. “For most builders it should be business as usual.”