New industry forecasts released by Master Builders Australia show Western Australia has inched closer to meeting its Housing Accord target.
Five months after the first forecasts covering the full five-year Accord period, WA is projected to decrease its housing shortfall from 15,420 to just 5,912 homes.
From 1 July 2024 until 30 June 2029, Master Builders forecasts 124,128 new home starts, 4.65 per cent lower than the Accord target.
Master Builders WA CEO Matthew Pollock said Western Australia and South Australia are the only two states to move closer to their targets, which is a testament to the state government’s efforts.
“The downgrade in the National April forecasts is off the back of a prolonged battle to curb inflation, persistently high interest rates and continued constraints on the supply side of the residential building market.
“WA has seen an earlier recovery in the residential building market compared to our eastern counterparts.
“This is good news, but more must be done to make up the remaining 6,000 homes.
“As a share of Australia’s population, WA will need to build around 130,000 new homes over the next five years. We have done this before, and we can do it again.
“The federal and state governments have acknowledged the challenges around planning, workforce and productivity, but we aren’t seeing enough flow through on the ground.
“Productivity in the industry has fallen 18 per cent over the last decade. The state government needs to expedite the rollout of planning reforms and build-ready land to reduce the high costs and time it takes to build.
“Workforce shortages continue to be the biggest challenge for the industry across all sectors. Domestically, we cannot fill this gap.
“The state government understand this and recently listened to industry to extend the construction visa subsidy program, but more needs to be done at a federal level, particularly to make it easier for employers to navigate the complex and costly visa system.
“The performance of higher density building will be crucial to meeting the target and combating the housing and rental crisis.
“Build times for these projects have blown out since the pandemic by around 20 per cent from approval to completion and costs have risen by around 40 per cent.
“Inflation is a capacity killer. Governments must speed up efforts to address these supply bottlenecks.” Mr Pollock said.
The non-residential and civil sectors of the industry continue to expand and are helping to keep economic growth in positive territory.
Non-residential building activity should fair quite well over the next five years, increasing by 7.5 per cent over the five years to June 2024.
The civil construction sector is forecast to expand by 19.2 per cent, largely driven by transport and utilities construction activity.
Mr Pollock added: “Continued investment and support in the whole built environment is important.
“We can’t build the homes we need without the appropriate commercial and civil infrastructure to support it. This includes critical infrastructure such as utilities.
“Builders are up to the challenge to reach these targets but the barriers on the road need to be cleared to get the job done.”
