Mingenew’s failed $1 land sale reveals how regions were left high and dry in State Govt’s building incentives

A Mid West Shire’s controversial plan to sell blocks of land for housing for as little as $1 in a bid to boost its dwindling population appears to have been an abject failure, with much of the blame pinned on State Government incentives that left regional areas struggling to find tradies willing to travel for work for a reasonable price. Hailed as a brave, out-of-the-box plan to bring new life to the aging town of Mingenew, in 2020, nine blocks were put on the market by the local Shire, with prices ranging from as little as $1 on the condition that development began within two years of purchasing. The blocks were quickly snapped up, with several disappointed would-be buyers placed on a waiting list, should someone drop out. But, two years later, not a single buyer has managed to break ground on their new home. Shire of Mingenew CEO Matt Fanning said three obvious bumps in the road had taken their toll — COVID, tropical cyclone Seroja and the WA building industry disruptions that have caused many firms to collapse, prompting significant increases in building costs. “We had the big three happen and no one could have seen that coming,” he said. While Shire president Gary Cosgrove agreed that TC Seroja and COVID had played a part in delays, he said the lack of tradespeople willing to come to regional areas had been the biggest stumbling block for the would-be new home-builders in Mingenew, pointing to State Government building grants as the cause of the disruptions. Created in 2020 to help promote investment in the residential housing market and stimulate jobs in the construction industry, which had been hard hit by COVID restrictions, the McGowan Government’s $20,000 Building Bonus grant came just days after the Morrison Government revealed its $25,000 HomeBuilder program in June 2020. People rushed to take advantage of the twin benefits — leaving the low-interest marketplace at risk of overheating and, Mr Cosgrove says, having the unintended consequence of leaving the regions high and dry. “The State Government building incentive was very city-centric, so all those builders stayed in the city and none of them came out to the country, and those who did come out charged like wounded bulls, so it was a double-edged sword,” he said. But Minister for Planning Rita Saffioti said that incentive was not intended to be city-focused. “I think it was targeted for everybody, (but) the reality is, in regional WA, we do have our own set of challenges. In many instances it’s some of the infrastructure, the headworks, to support new housing,” she said. The State Government says a fifth of all the grants were awarded to people outside the metropolitan area. JWH Group general manager Tony Harvie agreed that there had been a labour shortage outside of metropolitan Perth. “We have this elongated tail of this building boom, and the grants that were given out and the number of people that signed up for homes, the builders were quite conscious of how many homes we had the ability to build,” he said. “What we didn’t calculate, that in particularly in the regions, there’s a finite number of tradespeople.” REIWA CEO Cath Hart said the lack of workers willing to travel created long building delays across the State. “The shortage of trades in WA, as well as supply issues caused by the increased demand. . . have led to major delays in building commencements and completions. This has been ongoing for a number of years with many new homebuyers still waiting for their homes to be finished” she said. “The issue is worse in the regions, where there are fewer local tradespeople and builders are finding it extremely difficult to attract them from other areas. It is also harder to get materials to the regions.” Back in Mingenew, the effects of the lack of trades have left buyers of the bargain blocks facing their land being forfeited back to the council because they’ve failed to reach the key two-year building milestone. Only one purchaser came even close to starting their development. “There was one incident, the building was about to take place and it was going to be rented out, then the people who were going to rent it changed their mind,” Mr Cosgrove said. Despite the situation looking dire, the Shire says it is still optimistic after on February 9 voting to extend the building period. It is hoped that by allowing the block owners another two years to build, with building approval required within the first 12 months, the scheme might yet have a positive outcome. “This gives opportunity for the people that bought blocks ample time to build,” Mr Fanning said.