Interest-free loans set to get stalled WA homes completed
The Western Australian government will offer interest-free loans to help residential builders complete projects that have been delayed due to lack of funds.
Residential builders will be able to apply for interest-free loans of up to $300,000 in total – $60,000 per property, so long as the home has been under construction for more than two years.
To be eligible for the loan, applicants must also be able to prove that they are a solvent WA-based residential builder that has been in continuous business in Western Australia for more than four years.
The government has apportioned up to $10 million for the initiative, which will be doled out on a “first come, first served” basis.
According to the government, the initiative is a direct result of a recent roundtable held between the Cook government, the Western Australian arm of the Housing Industry Association (HIA) and other stakeholders in residential construction.
Western Australian Treasurer Rita Saffioti commented that the initiative was intended to both assist the building industry and prevent further insolvencies in the face of rising resource and labour costs, while also contributing to supply.
“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,” Ms Saffioti said.
“The innovative loan facility will enable builders who have been unable to complete homes under construction for two or more years due to cash flow constraints to complete these projects,” she said.
HIA WA executive director Michael McGowan described the program as a short-term measure to help the construction industry as it continues to normalise over the course of 2024.
“Skilled labour and cash flow 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,” Mr McGowan said.
The Real Estate Institute of Western Australia has come out in support of the measure, with the organisation’s CEO, Cath Hart, commending the Cook government for the initiative.
“WA needs a strong and consistent pipeline of new dwellings to meet the needs of our growing population so any measure that gets homes out of the ground is greatly appreciated,” Ms Hart said.
“Financial assistance that provides cash flow for builders, allows them to complete homes and remain solvent is welcome support to the building industry, and by extension, the established homes market,” she added.
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