Housing cash splash, but can the Budget deliver?

REIWA has broadly welcomed the 2026-27 State Budget’s $4.7 billion spend on housing over four years, but questions whether it adequately addresses issues of affordability and supply.

“We commend the significant investment in housing and I thank the Government for addressing several of the issues we have raised in our Pre-budget submission, however we don’t believe the Budget has gone far enough in some areas,” REIWA President Suzanne Brown said.

“There were no significant announcements addressing affordability, for either the sales or rental markets.

“The Government received a $2 billion windfall from stamp duty receipts last year due to bracket creep of house prices, and while the Budget has increased the stamp duty thresholds for first home buyers, they remain well below the median house price and many first home buyers will not be able to benefit from this change.

“There was also nothing substantial for renters, other than the ban on no grounds terminations, but that will not boost supply.

“WA has had housing supply issues for several years now and we have yet to see meaningful improvements resulting from previous Budget announcements. 

“We know our colleagues in the building industry welcome the certainty these Budget announcements give to their forward pipeline, but we are concerned about the timely delivery of new homes.

“When it comes to new supply, we believe it’s not a money problem but a resource problem. We simply don’t have enough people either in the construction industry and associated fields deliver on these promises in a timely manner. There have been Budget commitments to address workforce capacity and we hope this can help provide more completed homes for our growing population.”

First home buyers

In its 2026-27 Pre-budget submission, REIWA sought an increase to the thresholds for First Home Owner Rate of Duty to reflect the increasing cost of housing in WA. Further, REIWA recommended the thresholds be linked to REIWA’s lower quartile and median prices to ensure they remained relevant to the market and available to as many first home buyers as possible.

The Budget allocated:

• $197.4 million over four years to increase the thresholds for the First Home Owner Rate of Duty
• $10.7 million to delink the First Home Owner Rate of Duty and First Home Owner Grant (FHOG)

Ms Brown acknowledged the increase to the thresholds for the First Home Owner Rate of Duty, but said the Institute was disappointed yet again that they were not linked to REIWA data. 

“I also believe the increases do not go far enough to compensate for the strong price growth recorded across WA,” she said.

“The threshold below which no stamp duty will be paid has increased by $100,000 to $600,000, while the threshold for a concession has increased from $700,000 to $800,000.

“Unfortunately, this is already almost redundant. In the year to April only 11.7 per cent of dwelling sales in Greater Perth were below $600,000, with only 22 per cent of these being houses. On Budget day, only 6.5 per cent of active listings for dwellings in Greater Perth were priced below $600,000. Property prices are still rising and many first home buyers are going to miss out on the full concession.

“We have previously suggested the lower threshold, below which no duty is payable, should be pegged to REIWA’s annual lower quartile, which was $760,000 at the end of April.  

“The bottom 25 per cent of the market is the appropriate place to allocate the most support as this is the portion of the market where many first home buyers would be aiming to purchase a home. The upper threshold, above which no concession is payable, should be pegged to REIWA’s annual median, which was $900,000 at the end of April.”

“For many years, even during previous booms, the median house price has been within the stamp duty thresholds. That is no longer the case and the gap will continue to widen.

“I recognise increasing the thresholds could have an inflationary effect on prices, but this is likely to be mitigated by the current climate of rising interest rates, which reduces people’s borrowing capacity, along with the general rising cost of living.”

Ms Brown said first home buyers may receive greater benefit from the increase to the threshold for stamp duty concessions for vacant land purchases, as well as the delinking of the First Home Owner Grant and First Home Owner Rate of Duty.

“The threshold below which no duty is paid on vacant land purchases has increased from $350,000 to $450,000. A reduced rate of duty applies for purchases over $450,000 and below $550,000.

“With the annual sale price for land at $405,000, this is beneficial for first home buyers looking to build.

“First home buyers who build a new home will also benefit from an increase in the property price cap for the $10,000 FHOG from $750,000 to $800,000.

“In addition, the link between the FHOG and the First Home Owner Rate of Duty has been removed. Previously if the combined value of your land and new build was greater than the FHOG cap you would not be eligible for the stamp duty concession. Removing the link ensures first home buyers purchasing vacant land within the concession thresholds will receive the concession, even if they don’t qualify for the grant.”

Ms Brown said the Budget’s focus on housing supply could also benefit future first home buyers, but did not deliver relief for those looking to buy now.

Housing supply

The Budget includes a $2 billion investment in the delivery of new housing from both the State and Federal Governments.

Through the 100,000 Homes for First Home Buyers initiative, the Federal Government will contribute more than $1 billion across several WA Government initiatives to deliver more than 34,000 new homes across the State. This includes 11,000 dwellings solely for first home buyers.

Specific Budget measures include:

• $375 million to build 500 affordable homes for first home buyers that will be made available through Keystart’s shared equity scheme. 
• $250 million for a new First Home Buyer Commercial Financing Facility through Keystart to provide low-cost finance to multi-unit developments offering affordable homes.
• $250 million Pre-Sale Guarantee to help developers meet pre-sale thresholds for new apartment and townhouse developments.
• $694 million for Development WA to develop residential land to create thousands of new lots across the State and activate METRONET station precincts.
• $522 million for power and water infrastructure to unlock 83,200 lots as part of the Housing Enabling Infrastructure Fund.
• A $40 million top-up to the Infrastructure Development Fund, which includes $20 million from the Federal government.
• $73.1 million to support the extension and expansion of the off-the-plan concession scheme to encourage the creation of new supply. This scheme provides stamp duty concession for eligible dwellings purchased off the plan or under construction. It has been extended for another two years and expanded to include dwellings in a survey strata scheme, such as duplexes, triplexes, villas, and units. It is expected to provide more housing choice, including for first home buyers and downsizers.

Another measure the Government feels will support supply is the Foreign Buyers Duty Exemption for builder-sellers.

This new stamp duty exemption will apply to foreign buyers who add to housing supply. This will differ from the existing exemption, which applied only to significant developments of 10 or more dwellings.

To be eligible, foreign buyers will need to build and sell new dwellings within two years of the original purchase. This can include:

• buying vacant land and building a home;
• buying and completing a partially constructed dwelling;
• purchasing land with established property where more dwellings will be built than demolished; or
• repurposing or refurbishing commercial or industrial buildings into residential dwellings.

“Over the past few years, the difficulties in delivering new supply have placed significant pressure on the established homes market,” Ms Brown said.

“REIWA’s Pre-budget submission called for a range of measures to facilitate the delivery of new homes, including continuing the off-the-plan concession scheme, addressing bottlenecks in the delivery of new housing, and extending the Infrastructure Development Fund, with a greater focus on medium density.

“We’re pleased to see the significant commitment made to boosting supply across the State and the focus on more diverse supply. However previous budget announcements, which we have supported, do not appear to have led to a meaningful increase in supply.

“For example, last year’s Budget introduced the Housing Innovation Fund to support alternative production methods. How is this progressing? The off-the-plan concession thresholds were also increased and the scheme expanded to include townhouses. What were the results of this initiative? 

“We would also like some clarity on what is new supply or an extension of previous promises? Last year the first $101 million of the $400 million Housing Enabling Infrastructure Fund was committed to fund 33,000 new residential housing lots across Perth and key regional areas. How does this relate to the 34,000 new homes across the State announced in this Budget?

“These announcements make headlines, but when can we expect to see supply genuinely increase?” 

Downsizers

“Downsizers have told us stamp duty is a significant barrier to downsizing, along with a lack of suitable homes in their local area,” Ms Brown said.

“REIWA sought a $10,000 stamp duty concession for downsizers in our Pre-budget submission. However, the Treasurer believes that a lack of appropriate supply is the main issue facing downsizers, noting they would benefit from the stamp duty concessions offered by the off-the-plan concession scheme.

“We agree there could be some benefit, however we would have liked a specific concession to address the financial cost of downsizing, regardless of whether you buy a brand-new dwelling or established home. 

“We also note the difficulty in building affordable, high and medium-density developments in older established suburbs, and the timeframe it will take to provide these dwellings.”

The rental market

The budget provided:

• $13 million to extend the WA Rent Relief Program to support tenants facing hardship to June 2027. 

Ms Brown said supply and affordability were currently the two greatest challenges facing the private rental market, with neither adequately addressed by the Budget.

“The ban on no grounds terminations is not going to increase supply, and when combined with likely changes to the Capital Gains Tax discount and negative gearing at Federal level, could negatively impact investor sentiment and rental supply should investors choose to exit the market,” she said.

“And while there was further funding provided to extend the WA Rent Relief Program, this only supports those tenants that are already in rent arrears and at risk of eviction.

“We would have liked to see other measures to address rental affordability, particularly for the more vulnerable in our society, such as the elderly, older single women and young people entering the market for the first time. Many of these people will cut back in other areas to ensure they don’t fall into arrears and yet there was no support for them, other than general cost-of-living measures.

“To increase the supply of affordable rental housing and reduce costs for lower income households, REIWA sought support for a social impact property investment program, where the State Government could provide financial incentives to eligible investors who provide rental homes at below market rate. 

“Unfortunately, this received no support.

“Build-to-rent projects have the potential to provide consistent, affordable rental supply and last year we supported the announcement for Build-to-Rent Kickstart fund, but there have been no significant developments in this space yet.

“Further, the ending of the National Rental Affordability Scheme (NRAS) by 30 June will see rent prices jump by at least 20 per cent for over 1,000 tenancies, making housing less affordable and putting these tenants at risk.

“Over the past few years, the Queensland Government has purchased NRAS properties to ensure the ongoing supply of affordable homes. This was an opportunity our Government missed.”

Social and affordable housing

REIWA’s Pre-budget submission sought continued investment in social housing, with an annual target of 1,000 dwellings per year.

The Budget aims to provide 5,000 homes over the next four years. This includes 1,000 already under construction.

Specific commitments include:

• Over $1 billion of new investment under the Housing Australia Future Fund (HAFF) partnership between the State and Federal Governments to deliver an additional 1,426 social and affordable homes.
• $452 million to deliver a further 165 social housing dwellings, refurbish 215 houses, support land acquisitions, and undertake maintenance on 45,000 social homes.

"The challenging housing conditions of the past few years have put significant pressure on WA’s social housing system, with waitlists increasing," Ms Brown said.

"Our members have seen firsthand the toll the rental crisis has taken on the more vulnerable in our society and ongoing investment in social housing is desperately needed. 

"We welcome the commitment to provide an additional 5,000 social and affordable homes over the term of this government and hope to see this number increase.“

Regional housing 

“The current shortage of Government Regional Officer Housing (GROH) has seen government departments look to the private rental market to house staff and this has placed an additional burden on regional rental markets that are already severely challenged and seen rent prices become less affordable for residents,” Ms Brown said. 

“REIWA’s Pre-budget submission requested more investment in GROH to support regional communities and while there was funding committed, 500 homes over the next four years is very unlikely to be enough to address the issues in these markets.

“In particular, Bunbury, which is a thriving regional centre, is set to get no additional GROH dwellings.”

The Budget includes a $692 million investment in regional housing, specifically:

• $170 million to deliver 179 new GROH houses through the Resources Community Investment Initiative
• Expansion of the GROH Investor Program to fund at least 200 additional GROH homes targeting institutional investment
• $184.4 million for a revamped Shared Equity Home Ownership Subsidy Scheme to help GROH tenants buy a home in the town in which they live
• $64.9 million to acquire additional homes and maintenance for GROH, WA Country Health Service and Horizon Power staff.

Additional measures to boost regional housing supply include a $50 million boost to the Regional Housing Support Fund and a $116 million investment to deliver 112 new lots in the Western Edge residential development in South Hedland and 111 lots at the Broome North Residential development.

Boosting housing construction capacity

To increase construction capacity and speed up housing delivery, the Budget includes investment to grow the workforce and modernise building methods, including:

• $48 million for two Housing and Infrastructure Advanced Manufacturing Facilities in Kwinana and Neerabup. These facilities are expected to support the delivery of up to 10,000 apartments by 2030, as well as non-residential infrastructure such as hospitals and schools;
• $19.6 million for an additional 330 places under the Group Training Organisation Wage Subsidy Program, bringing the total funding to $156.1 million, and supporting over 1,300 apprentices and trainees;
• $18.7 million for the extension of lower fee and fee-free TAFE into 2027 to support the training of new construction workers, including electricians, plumbers, bricklayers and plasterers; and
• $13.1 million to extend the Construction Visa Subsidy Program and Build a Life in WA incentive with an additional 1,100 places, as well as to extend operations of the Construction Migration Office.

State Government housing market forecast

The State Government forecasts Perth’s median house price to increase by 13.5 per cent in 2025-26, dropping to 4.6 per cent in 2026-27 as population growth moderates and new home completions increase. 

WA’s population increased 2.2 per cent in the year to September 2025. The government is estimating growth of 1.6 per cent for 2025-26 and 1.5 per cent for 2026-27. 

Building completions reached a peak of 22,655 in 2024-25 and ended the year at 20,544. 

With housing approvals rising 13.1 per cent to 25,000, completions are expected to increase further over the coming year. Ms Brown noted this figure does not take into account any potential impacts of the conflict in the Middle East on the building industry.