A new Property Council report has revealed 35 per cent of new apartment developments are on hold across Perth due to the impact of the state’s ongoing skills shortages.
The report, entitled Delivering Housing Supply and Affordability for Western Australians, estimates 10,000 apartments have been delayed, with price escalations making the projects not currently feasible and potentially leading to a housing ‘affordability crisis’.
The Property Council notes that $2.2 billion in projects in the pre-DA stage are currently on hold due to the rising costs of labour and materials eliminating margins.
Property Council WA Executive Director, Sandra Brewer believes that higher costs and the associated slowdown in the construction pipeline could lead to affordability issues.
“Swift action is required to avert a future housing and affordability crisis,” Ms Brewer said.
“Despite positive policy announcements during the pandemic, like the WA Building Bonus and stamp duty rebates for apartments sold off-the-plan, years of under-supply and under-investment have put pressure on house prices.
“As housing becomes more expensive, people move down the property ladder, escalating demand for social housing and puts more people at risk of homelessness.”
Ms Brewer said the Property Council had identified 15 recommendations that will support the general housing market, including rapid migration growth, facilitated by the removal of the foreign buyer surcharge, and stimulating build-to-rent projects.
“This report has outlined some policy levers around property taxes and incentivising population to have the skills that we need to deliver housing supply,” Ms Brewer said.
“There are also recommendations for different housing models such as build-to-rent and other programs that are focused on social and affordable housing policies.
“Periods of rapid economic growth have shown us that fixing housing affordability requires policy focused on workers first – because, without workers, property markets cannot deliver the homes people need.”
Ms Brewer believes WA is very attractive to other states, given the relative level of house prices, which could encourage workers when the borders open.
“We hope that the border opening will enable skilled people to move to the region. Research shows one in 10 New South Wales residents are extremely or very likely to consider moving to WA.
“One of the key benefits they see is housing affordability. We know it’s a big attractor, so we’d like to have the State Government change policies so we can attract skilled workers to WA.”