I was in Karratha, Western Australia today with the Senate Committee inquiring into housing affordability. I hadn’t been to this town before, although I have previously been to Port Hedland, which is ‘just up the road’ (about 240 kilometres).
The cost and availability of housing in Karratha (and most of the wider Pilbara region) is just appalling. While people working in the mining and resource industries in the region earn very high pay, many agencies and local businesses cannot get sufficient staff simply because those people cant afford the housing costs (assuming they could find a house to start with).
The Committee was told that weekly rent for a four bedroom house was around $1200 in Port Hedland and around $1500 in Karratha. We saw fairly average looking houses being built that we were told would be selling for up to one million dollars.
It was a reminder that the nature of housing need is very different in different parts of the country. I have been sceptical about the incessant mantra from property developers arguing that inadequate supply of land for development is the main reason for the crisis in housing affordability and availability, but there’s no doubt that at least for this region inadequate supply is at the heart of the problem.
Land is starting to be released by the state government in more reasonable quantities in recent times. While that will hopefully lead to a tapering off in the ridiculous spike in housing costs that is currently occurring, in one sense its too late, as they can’t really reverse the rise by releasing too much at once without devaluing the (overpriced) housing asset that many people have now paid for. A number of witnesses appearing before the inquiry argued that the legal requirement for Landcorp, the state government’s land agency, to maximise its earnings had contributed to both the cost of land and the delays in it being released.