- Western Australia update
Strata reform in Western Australia
The WA property industry kicked off 2016 with the Minster of Lands, Terry Redman, announcing Cabinet’s approval to draft amendments to the Strata Titles Act 1985 (WA). This follows a comprehensive process to formulate the reforms, which began in September 2013.
The proposed reforms, aimed at providing more flexible and sustainable housing options, will help the Government cater for an expansion in the state’s population over the next 15–20 years, with the expectation that more people will live in strata titled properties. The reforms will bring Western Australia’s strata laws into line with practices already implemented in NSW and other eastern states.
The changes will deliver reforms to the following key areas:
- New forms of strata – the amendments aim to provide more flexibility in the existing regulatory framework by allowing more than one strata scheme within an integrated development, with an overarching management body known as a community corporation.
- Buyer information and protection – this will ensure effective and relevant information given to potential buyers is provided in a user-friendly format. Additional requirements for new forms of tenure being introduced have also been evaluated.
- Resolving strata disputes – the process will be made simpler and faster by granting the State Administrative Tribunal (SAT) increased powers and responsibilities, including the ability to resolve disputes for the new types of strata.
- Management of strata schemes – this measure aims to simplify the way in which a development is undertaken over an extended period of time. It seeks to simplify the existing obligations on the developer to obtain consent to variations, while at the same time retaining a level of certainty for owners in the development.
- Termination of strata schemes – this process provides an alternative to unanimous resolution to terminate a scheme while ensuring the rights of all owners are adequately considered through a procedure and fairness review by the SAT. The reforms advocate for a 75 per cent majority vote for the termination of schemes, with protections in place for owners.
These reforms have been welcomed by the property industry. It is hoped they will entice property developments and investors into the WA property market, bringing in an increased amount of dense, mixed-use, in-fill developments.
Perth office vacancies continue to climb
The Perth office vacancy rate continues to climb, hitting its highest level in 21 years after an injection of new office supply and the decline of mining activity in WA.
The Property Council of Australia’s latest Office Market Report, released last week, found vacancy rates had increased from 16.6 per cent to 19.2 per cent over the last six months, with more than 113,000 sqm of new office supply added to the Perth CBD.
The majority of grades of office space recorded a rise in vacancies, with the Premium grade increasing from 9.3 per cent to 15.9 per cent in the six months to January 2016. Rents have fallen in the vicinity of 40 per cent since their peak.
Industry commentators expect the vacancy rate will rise slightly further in the next six months before stabilising as the pipeline of new supplies diminishes.
ANZ/Property Council Sentiment survey – Western Australia
The recently released ANZ/Property Council Sentiment Survey of WA has property industry executives indicating a difficult twelve months ahead for the local industry, with little to no growth in most property sectors. The survey results are not a surprise to many, given the current level of uncertainty in the national economy and the difficulties faced by the local economy as it transitions from mining. However, survey participants do believe that opportunities still exist in the property market, highlighting retail investment and retirement living as two sectors with positive outlooks.
To read more about the survey please go here.