The Property Council WA’s Cost of Construction Breakfast featured a panel of experts discussing strategies for rethinking risk across developers, builders, and financial institutions, ultimately fostering a robust development pipeline.
Kicking off the event, Matt Billingham (Turner & Townsend) delivered a keynote on current market conditions and their impact on the construction industry. Matt referred to the recently conducted Turner & Townsend International construction market survey, which outlined the numerous global forces shaping the future of the WA property industry, including commodity price volatility, global supply chain and economic uncertainty, and local project and labour force challenges. The survey noted Perth is now the second most expensive city to build in Australia (after Sydney), with the market expected to remain warm.
Matt discussed:
- The dramatic rise of WA construction costs, up by over 20 index points since the December 2020 quarter, and while the anticipation is that cost growth will slow, costs are not likely to go backwards
- Cost escalations, along with supply chain uncertainty and a tight labour market are the three key challenges to the WA property market
- Expected improvements to construction in the supply chain over the coming twelve months; and
- Australia and New Zealand ranking as the third most expensive market for construction labour, behind North America and Europe, suggesting industry should attempt to reduce labour reliance through technology.
Lyn O’Brien (ADCO Constructions), Philip Anderson (Westbridge Funds Management), Troy Leber (Commonwealth Bank), Mark Kepplinger (Encon) and moderator Tiffany Allen (Construction Training Fund) then took to the stage to engage in a dynamic discussion on risk mitigation within the industry. Read on for some of the highlights:
- The panel called for enhanced collaboration and communication across the industry to collectively address risk and improve the delivery of housing supply
- Urged industry to consider a range of contracting models and move away from fixed-price contracts
- Proposed embracing modern construction methods to alleviate labour shortages, including pre-fabrication and offsite construction
- Discussed labour scarcity and talent retention, urging government initiatives to attract and retain talent, especially among women
- Stressed the importance of a safer and more supportive industry culture, addressing both the mental and physical well-being of workers
- Advocated for promoting Perth as an appealing place to live and work, underscoring its market positives and affordability compared to the East Coast
- Recognised an opportunity to attract workers from other sectors, leveraging transferable skills from industries like the defence force.
Thank you to our excellent speakers for sharing their insights, our attendees gained valuable information to help fortify their businesses against risk.
Huge thanks to our generous sponsors for their support: Construction Training Fund, Cedar Woods Properties and City of Bayswater.