Property experts warn that a hidden problem is causing serious problems for housing prices, which could affect huge inflows.
A property expert has warned that Perth is looking down on the barrel of a potential housing crisis as labor shortages hold up more than a third of the city’s approved apartment development.
A new report from the Australian Property Council has revealed that more than a third of Perth’s approved apartment developments are stuck due to lack of skills.
Another 2 2.2 billion project has yet to be approved and has been stalled due to rising prices.
The report, compiled by 21 leading developers, estimates that about 10,000 Perth apartments have been delayed and property prices are rising.
“Financial institutions must have adequate margins to cover project requirements and will not lend without it.”
Sandra Brewer, executive director of the Property Council WA, said the lack of skilled workers was to blame for the closure of the Australian border due to Covid-19.
“We are now facing 150,000 fewer workers than we do,” he told NCA Newsware.
Mrs Brewer said there was also a material shortage due to rising construction costs that affected manufacturers.
He said it was “vital” to have a medium-density apartment in Perth to avoid a potential housing and purchasing power crisis.
“Despite positive policy announcements during the epidemic, such as for WA building bonuses and stamp duty rebates off-plan for apartments sold, the low supply of the year and low investment have put pressure on home prices,” Ms Brewer said.
“As housing becomes more expensive, people fall off the property ladder, increasing the demand for social housing and putting more people at risk of becoming homeless.”
The Property Council report found that Perth had a vacancy rate of 0.9 percent and an average house price of $ 40,000.
Sales data from May last year showed that 20.27 per cent investors were selling whereas only 5.56 per cent were buying.
It recommends further migration to Western Australia, the removal of foreign buyer surcharges for skilled migrants and the introduction of an apprenticeship guarantee and wage tax relief for small businesses to avoid future supply problems.
Originally published as Property experts warn of a potential housing crisis facing a state