Expert-led tax essentials delivering practical insights and strategic foresight. Learn more.
The State Government’s plan to reform metropolitan local government has been dealt a fatal blow.
Ratepayers in in East Fremantle, Kwinana and South Perth recently voiced their disagreement with the reforms by voting against the amalgamation of Perth’s local councils. The State Government was dealt an additional setback when the Western Australian Local Government Association (WALGA) also withdrew its support for the reforms.
The proposed reforms, which have been six years in the making, included plans to almost half the number of Perth councils from 30 to 16. The acceptance of the reform would have provided property developers with greater certainty during the local planning and building approvals process.
The Property Council of Australia and the property industry remain in full support of the proposed local government boundary adjustments and the passing of the Capital City Act with concerns that the abandoning of reform altogether will send planning and building approval processes backwards.
It is unlikely amalgamations will be revisited any time soon. In addition the ‘voluntary’ amalgamation scheme has collapsed, meaning the third tier of government will continue, unchanged, albeit after a lengthy and costly failed reform process.
The latest Office Market Report issued by The Property Council of Australia has reported the vacancy rate in the Perth CBD at 14.8%, the highest in almost two decades.
Premium-grade buildings were the only category to report a single digit vacancy rate at 8.5%.
The report is forecasting the Perth CBD vacancy rate to continue to rise, peaking at around 18% in 2016. Contributing to this increase is approximately 149,600 square meters of commercial office space due to come online during the coming year.
The office market in Perth is often seen as the barometer for the state economy and with no new market sector on the horizon to replace the cooling mining industry, it is predicted that once the vacancy rate has peaked, there will be slow recovery, with the office vacancy rates predicted to be hovering around 14% in 2020.
The higher vacancy rates are providing office tenants with more options when evaluating their desired office location. Office tenants trading will consider trading up into better quality office space and those who were priced out of the CBD market during the boom time may return with the lure of rising incentives.
Home ownership rates have not kept pace with Perth’s surging population according to the recently released Committee for Perth's Spatially Transforming City report.
The research indicates Perth is in the midst of a growing property ownership struggle with a 10% fall in the rate of people who own their homes over the last 20 years, despite higher levels of education and earnings.
Whilst a bigger percentage of people were buying their homes, fewer fully owned their home and are faced with increasing proportions of their income being spent on servicing mortgages.
Whilst the State Government Affordable Housing Strategy is bringing more homes into the market, increasing delivery of high density developments and affordable housing around activity hubs must remain the priority over the next 20 years.