WA faces a shortage of around 20,000 homes within four years, fearing this will keep local house prices rising.
The Real Estate Institute of WA said the state needed to build 19,500 homes a year to keep up with population growth, new demolitions and to address existing shortages.
But official ABS figures show WA completed less than 14,000 new homes – which include both houses and flats – last year as the sector grapples with labor shortages work and supply.
REIWA chairman Damian Collins told The West Australian this slow pace of construction puts WA on track to build 56,000 homes over the next four years, not the 78,000 needed.
“Houses are taking twice as long to build as they did a few years ago,” Mr Collins said.
“The issue is less about the demand for new construction from homebuyers, it’s about the ability to complete housing with the current workforce we have.”
Mr Collins said the state was already in housing shortage, with 8,000 more units needed to restore balance and end the rental crisis.
Official state government population projections, contained in recent budget documents, predict an additional 150,000 people living in WA over the next four years.
If 2.5 people live in each house, the state will need 60,000 properties to accommodate new West Australians.
An additional 10,000 new homes will be needed to replace those to be demolished over the next four years.
The combined demand means the state was expected to build 4,875 homes each quarter, but in the last three months of 2021, only 3,394 homes were completed.
Mr Collins called for a more skilled workforce, saying the current pace of construction would put further pressure on rents and house prices.
“While the 2020 grants have helped get construction started, there simply isn’t enough skilled labor to complete the properties in a timely and cost-effective way,” Mr Collins said. “Some of the material supply issues may ease this year, but we still can’t complete the number of homes we need.”
But he acknowledged that it would be more difficult to attract migrant labor given that there were construction booms all over the world.
Rising house prices and a lack of affordable housing were huge issues in the federal election, with Scott Morrison’s plan to allow first-time home buyers to dip into their super for a deposit criticized by experts who said it would drive up house prices even more.
Labor has embarked on a ‘Help to Buy’ scheme, which means the government will help first-time home buyers by buying up to 40% of a property with them. The government would then own a share of the house which could be bought back over time.