- $10 million loan facility to support the completion of stranded homes in WA
- Eligible residential builders will have access to interest free loans of up to $300,000
- Scheme will assist completion of homes that have been under construction for more than two years
- Initiative is targeted and measured to support builders and home buyers left stranded
The Cook Government has today announced the establishment of an interest free loan facility to help residential builders complete unfinished properties, and get Western Australians most affected by delayed construction timeframes into their new homes.
The Builders' Support Facility will provideinterest-free loans to support eligible residential builders complete new homes that have been under construction for more than two years.
A maximum of $300,000 will be available to each eligible builder (up to $60,000 per property), with payments made in instalments to stimulate more completions.
The loan scheme is targeted and measured to help builders complete outstanding projects, as well as prevent further insolvencies, and more homes being left incomplete.
The initiative is a direct response from a recent roundtable held between the Cook Government, HIA WA, and the housing and construction industry, to boost housing supply and affordability in Western Australia.
The facility will offer interest-free loans to builders that meet the eligibility criteria, which include:
- being a solvent WA-based residential builder that has been in continuous business in Western Australia for more than four years; and
- have one or more uncompleted homes in Western Australia that commenced construction prior to January 2022.
The $10 million interest free loan scheme is the latest measure to be put in place by the Cook Government to address the State's housing needs including:
- $2.6 billion in social housing and homelessness measures, including the delivery of around 4,000 social homes;
- $80 million Infrastructure Development Fund;
- $55 million strategic investment in water and wastewater infrastructure;
- transfer duty concessions for off-the-plan apartments and apartments under construction;
- $10,000 incentive for property owners to transition existing short-term rental accommodation into long-term rental homes for Western Australians;
- $24.4 million WA Rent Relief Program to assist Western Australians experiencing rental stress or at risk of eviction; and
- Planning reforms to cut red tape and accelerate the delivery of new housing.
A registration of interest (ROI) is now available at www.smallbusiness.wa.gov.au/builders, with subscribers to be notified when the loan facility opens for applications. The ROI is open until Wednesday, 31 January 2024.
Builders are encouraged to register early for the facility, which will be available on a "first come, first served" basis to eligible applicants. Applications will be subject to financial probity and credit assessment.
Comments attributed to Treasurer Rita Saffioti:
"We know that the construction industry has experienced significant labour and material price hikes over the last few years.
"This has delayed some residential builders from completing homes as the cost has increased significantly.
"We have also seen many families building new homes left stranded with incomplete projects and no timeline for delivery.
"The innovative loan facility will enable builders who have been unable to complete homes under construction for two or more years due to cashflow constraints, to complete these projects.
"Providing secure housing to Western Australians, boosting housing supply, and supporting a sustainable building industry are among the top priorities of the Cook Government."
As stated by Commerce Minister Sue Ellery:
"Building a new home is a major life event and can be stressful in the best of times.
"The Cook Government continues to engage closely with the residential construction industry to address the challenges they are being faced with.
"We are doing everything we can to support builders to complete unfinished properties, get Western Australians into their new homes, and boost overall housing supply."
As stated by Housing Minister John Carey:
"The Cook Government is acutely aware of the current housing market across the country and its impacts on many Western Australians - including those who have experienced construction delays in the face of a tight construction market.
"This $10 million loan facility will support eligible residential builders to complete unfinished houses to get more Western Australians into their new homes, and further bolster WA's housing stock.
"We've funded a range of new initiatives and reforms to support both the construction industry - as well as homeowners and renters - and this initiative further boosts these efforts.
"Our Government is investing a record $2.6 billion in housing and homelessness measures, and we've added more than 1,800 social homes, with more than 1,000 social homes currently under contract or construction, throughout Western Australia."
As stated by Housing Industry Association WA Executive Director Michael McGowan:
"The challenges the residential building industry has faced over the last three years have been well documented, and builders all around Australia have suffered as a result of significant cost escalation, material shortages, and the consistent supply of skilled labour.
"Skilled labour and cashflow have been builders' biggest challenges over the last 12 months. Implementing the Builders' Support Facility takes steps to support builders who may be suffering cash flow issues to complete homes for their customers.
"As the residential building industry normalises over the next 12 months, the targeted Builders' Support Facility is a measured way to support those needing short term assistance to complete homes that have been under construction for more than two years, by providing a short-term cash injection targeted at getting homes finished without impacting the wider industry.
"When a builder enters administration, the industry and the State suffer. The builder and their family lose everything, trades and suppliers suffer losses, with consumers having to wait to re-start the home building process. The Builders' Support Facility will hopefully minimise the number of people that have to go through this process."
