Housing will be a key issue in the WA election — here's what the parties are promising, and what the experts say

With housing a key battleground in next year's election, the major parties are already honing their pitches.

WA’s rental vacancy rate is slowly returning to a more normal level, but house prices are still expected to continue rising next year after going up about 22 per cent over the last 12 months alone.

So what are the major parties promising to do about it, and how do those ideas stack up with reality?

What is Labor promising?

Labor kickstarted its re-election campaign earlier this month with a joint federal-state promise to build 1,800 social and affordable homes across WA.

On Thursday it announced more people would be eligible for KeyStart, the government-backed program which offers low-deposit loans to people who might not meet the requirements of banks.

Price limits for a property to be eligible have increased from $650,000 to $730,000.

A search of the Real Estate Institute of WA (REIWA) website shows about 1,200 more homes are now eligible for the scheme.

"I'm very hopeful that this change … will help more West Australians to get their first home," Housing Minister John Carey said.

That comes on top of things they've already done in this term, like lifting the threshold for first home buyers' stamp duty concessions, introducing concessions for off-the-plan apartment purchases and committing $80 million to pay for infrastructure needed to get apartment developments off the ground.

What about the opposition?

The Liberals and Nationals have been focused on further changes to stamp duty.

In the unlikely event the Liberals take power in March, they'd lift the first homeowner exemption and concession thresholds by $100,000, taking them to $550,000 and $700,000 respectively.

A first homebuyer purchasing a home under $700,000 would save up to $15,000 in stamp duty, according to the party.

They're also proposing a $20,000 rebate to encourage older West Australians to downsize.

The Nationals would go one step further, abolishing stamp duty altogether for first homebuyers. 

To boost supply, the Liberals would like to spend $300 million on "enabling infrastructure" for 90,000 homes and $200 million to make apartment developments more viable.

The regions would be looked after by a $1 billion regional headworks fund proposed by the Nationals, on top of their plan to offer payments to homeowners and loans to home builders if projects take longer than two years. 

What do the experts think?

Curtin University housing professor Steven Rowley said promises around stamp duty and KeyStart were "largely cosmetic".

"These little bits here and there, yes [are] helpful, but [are] really just bringing forward people's decisions by a year or two," he said.

"You're really needing schemes that will help people that wouldn't otherwise have been able to get into the property market, and that requires significant amounts of funding … things like shared home ownership."

Former REIWA president Joe White agreed tinkering with stamp duty wasn't enough to make a difference.

"We definitely need to look at the whole property tax system, because at the moment it is not serving us well," he said.

"But frankly, I think the problem is too big for either of the parties to tackle, and I don't think either are going to tackle it in the lead-up to the election because it's big and it's controversial, and guess what, it's hard.

"Until we address the constraints to supply, making it easier [for] people to buy the same amount of stock is not going to solve the problem. In fact, it can potentially make it worse."

How do we address supply?

Not easily.

The infrastructure funding rolled out by Labor and promised by the Liberals was "sensible policy", Professor Rowley said.

"The trouble is, at the moment, the actual balance between revenue and costs in most locations is still so out of whack it's only going to make a difference at the margins, and these tend to be apartments that are really pretty expensive in the first place," he said.

"But it's certainly better than nothing."

Mr White also suggested planning reform around medium-density developments as an area for improvement, on top of planning changes already introduced by Labor.

But ongoing skills shortages, in part thanks to the strength of the mining industry, complicates things further and is something state and federal governments have been trying to address with training and immigration – both solutions which take time.

So we’re stuck?

Professor Rowley said an extreme option was for the government develop land itself, since its margins were smaller than the private sector.

"When we are reliant on the private sector to deliver 96 per cent of our housing, there's very little the government can do, which is why I say well, maybe we shouldn't be relying on the private sector," he said.

"We certainly had periods in the past in this country, and many countries, where governments have become major house builders.

"Given we're in a significant crisis at the moment, and a market which is subject to significant failure, maybe government needs to intervene directly."

Even Professor Rowley acknowledges it's unlikely though.

But with three months to go until the election, this is just the start — so the experts, like everyone else, will be waiting to see what other potential solutions the parties come up with before March.