Perth is eyeing the barrel of a potential housing crisis as labor shortages account for more than a third of the city’s approved apartment developments, a property expert has warned.
A new report from the Property Council of Australia has found that more than a third of approved apartment developments in Perth are on hold due to a skills shortage.
Another $2.2 billion worth of projects that have yet to be approved are also stalled due to rising prices.
The report, compiled by 21 leading developers, estimates around 10,000 apartments in Perth have been delayed and property prices have risen.
“Financial institutions require projects to have sufficient margins to cover contingencies and will not lend without it.”
Sandra Brewer, executive director of the Property Council WA, says Australia’s border closures due to Covid-19 are largely to blame for a lack of skilled workers.
“We are now facing 150,000 fewer workers than we would have,” she told NCA NewsWire.
Ms Brewer said escalating construction costs were also leading to a shortage of materials which affected builders.
She said it was ‘vital’ to have medium-density flats to head off a possible housing and affordability crisis in Perth.
“Despite positive policy announcements during the pandemic, such as the WA Building Bonus and stamp duty rebates for apartments sold off-plan, years of undersupply and underinvestment have put pressure on housing prices. ‘real estate,’ Ms Brewer said.
Judo Bank economic adviser Warren Hogan said Australia’s economy is in “great shape” considering all it’s been through.
“As housing becomes more expensive, people move down the ownership ladder, increasing demand for social housing and putting more people at risk of homelessness.”
The Property Council report found Perth had a rental vacancy rate of 0.9% and the median house price rose by $40,000.
Sales data from May last year showed that 20.27% of investors were selling while only 5.56% were buying.
It recommends further boosting migration to Western Australia, scrapping an overseas buyer surcharge for skilled migrants and introducing an apprenticeship guarantee and payroll tax relief for small businesses to avoid future supply problems.