Unlocking empty homes: WA offers incentives to rent out vacant properties

• WA's newest incentive will pay property owners to rent out their vacant properties.
• This scheme has the ability to add 1,000 rental properties to the market, and quickly.
• But with Perth's high rent and population growth, will this be enough?

Western Australia’s Cook Labor Government has launched a groundbreaking initiative to tackle the housing shortage and surging rental prices: the $5 million ‘Vacant Property Rental Incentive Scheme.’

Designed to boost the availability of rental properties across the state, this innovative program incentivises property owners to lease out their vacant properties, providing a potential solution to the housing crunch.

Payday for property owners

Under the scheme, property owners with properties that have been vacant for six months or more stand to benefit. By committing to renting out their properties for a minimum of 12 months, they become eligible for a one-time payment of $5,000, provided they meet specific criteria.

These criteria include the property being self-contained with its own bathroom and kitchen, and not having received previous payments under the STRA Incentive Scheme. Up to a thousand Western Australian property owners could qualify for this incentive.

“This initiative has the potential to bring up to 1,000 properties back onto the rental market that would otherwise be sitting vacant and unused and, most importantly, could support up to 1,000 Western Australian households to find a long-term rental.”

WA Treasurer Rita Saffioti

Addressing housing challenges in Western Australia

Along with the introduction of the new scheme, the Cook Labor Government also confirmed they would be extending the Short-Term Rental Accommodation (STRA) Incentive Scheme, where property owners could receive $10,000 if they turned their short-stay investment properties into long-term rental properties.

Premier Roger Cook emphasised the urgent need to bolster housing supply in Western Australia. “Western Australia’s nation-leading economy and attractive lifestyle are driving significant demand for housing,” he stated. “We are leaving no stone unturned in our work to boost the supply of homes.”

“Modelled on our successful Short-Term Rental Accommodation Incentive Scheme, this latest offer is designed to address the issue of much-needed properties sitting vacant and make them available for rent.”

Expected impact on housing availability

With the scheme expected to bring up to a thousand vacant properties onto the rental market, it is providing a significant boost to housing availability in Western Australia. This is particularly important given the state’s rapidly growing population and the increasing demand for rental properties.

In fact, recent data from CoreLogic has revealed a significant shift in Australia’s rental landscape, with Perth now claiming the third spot nationwide in average weekly rent prices, surpassing both Melbourne and Brisbane.

Following Sydney and Canberra, Perth has seen a remarkable surge, with a median weekly rent increase of 13.6% over the past year, currently resting at $669.

Australian Capital Cities Median Weekly Rent & Value Change – April 2024

DATA SOURCE: CoreLogic

Along with this, Perth’s population has continued to increase, recording the country’s highest population growth. Last financial year alone, over 80,000 new residents moved to Perth confirmed the Australian Bureau of Statistics, with nearly 60,000 of these immigrating from other countries.

As these trends persist, the significance of the 1,000 additional rental properties facilitated by this scheme cannot be overstated. Unlike new developments, which often take years to materialise, these properties can be made available almost instantly.

But while they offer much-needed relief to individuals and families urgently seeking housing, it’s evident that resolving Western Australia’s housing crisis remains a daunting challenge that demands sustained efforts.

A long way to go

In addition to the incentive scheme, the government is being implored to employ other measures to increase housing supply and affordability, such as investing in social housing, reforming planning laws to encourage the development of more affordable housing, and working with the private sector to deliver innovative housing solutions.

The CEO of Master Builders Association of Western Australia (MBAWA), Matthew Pollock, commends the government on taking these steps, but acknowledges that promising more houses is just one piece of the puzzle.

“This scheme seeks to better utilise existing stock to boost housing supply across the continuum. With rental vacancy rates still at extremely low levels, it is hoped the scheme will be able to help ease this pressure going forward”, Pollock says.

“It remains the biggest challenge industry faces is workforce shortages, and the impacts of industrial relations changes cannot be underestimated.”

He continues, “Government priority needs to be growing the building and construction workforce. The Cook Government continues to make positive steps to address the housing supply challenges, this scheme announced today shows this; but the outside-of-the-box thinking must also be applied with far better apprenticeship incentives, reskilling migrants already here, and a targeted international campaign to bring in skilled migrants to address the skills and labour shortages.”

“If we are going to fill the housing shortage and meet future demand, urgent supply side reforms are needed, or the housing targets simply will not be met.”

Matthew Pollock, MBAWA

Planning ahead

As Western Australia continues to grapple with its housing shortage, the Vacant Property Rental Incentive Scheme offers a glimmer of hope for those struggling to find affordable rental properties.

With the state government working to increase housing availability and support property owners, it is hoped that this innovative scheme will help to ease the pressure on the rental market and provide much-needed relief for Western Australian renters.

However, it is clear that there is still much work to be done to address the state’s housing crisis, and the government will need to remain committed to finding long-term solutions.