Skills shortages crippling apartment pipeline
More than a third of Perth’s approved pipeline of apartment developments - and a further $2.2 billion of apartment projects yet to achieve development approval - are on hold due to skills shortages, according to research conducted with 21 leading apartment developers.
A new Property Council report, Delivering Housing Supply and Affordability for Western Australians , estimates around 10,000 apartments have been delayed, with price escalations making the projects not currently feasible.
The report calls out the significant impact this pipeline disruption will have on affordability. Already supply constraints and market buoyancy has seen the median house price within 10 kilometres of Perth’s CBD lift to more than $1 million, with the average Perth family now required to save for an extra two years to cover house price rises over the last 12 months alone.
“Swift action is required to avert a future housing and affordability crisis,” says Property Council WA Executive Director, Sandra Brewer.
“Despite positive policy announcements during the pandemic, like the WA Building Bonus and stamp duty rebates for apartments sold off-the-plan, years of undersupply and underinvestment have put pressure on house prices,” Ms Brewer says.
“As housing becomes more expensive, people move down the property ladder, escalating demand for social housing and puts more people at risk of homelessness.”
The Property Council’s report argues that the long-term solution is policies supporting housing supply and providing diverse housing choices. The report recommends policy responses that prioritise population growth, address labour shortages, remove barriers to investment and develop alternative housing models.
“We know housing affordability is influenced by many interrelated factors that cannot be addressed in isolation.
“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 concluded.