Labour shortage in Western Australia

January 11, 2010

Western Australia has the strongest home building market in Australia, and is at risk of running into the same drastic delays and labour shortages which epitomised the last boom.

Figures from the Housing Industry Association show WA's new home sales rose by 12.1% in November, the strongest increase in Australia, against a national average rise of only 0.3% for the month.

The modest national growth was due partly to lingering restrictions on finance, as the economy fought its way back from the global financial crisis.

HIA chief economist Harley Dale said WA's first homebuyers and investors had helped the local market to the top in Australia's new home sales, and the trend would continue well into 2010.

The rebound had prompted fears of a local price boom, as the burgeoning residential housing market competed with the gas and mining industries for tradesmen.

Mr Dale said the shortages experienced during the last boom could reappear within a year.

"Our resources at present are not as stretched as they were in 2006 and 2007, but our concern is that if we don't continue to look at planning issues, and if we don't continue to upskill the domestic workforce, then we will be right back where we started by the end of 2010," Mr Dale said.

During the last boom, construction times for new homes blew out from six months and tradesmen charged 30% more than the hourly rate.

Gemmill Homes Group building manager Jack Pleiter said most builders' order books were already full, and the industry was anticipating a busy year.

Mr Pleiter said it was inevitable that prices would eventually increase under increased demand for labour, even though companies such as his own had used the downturn to secure contractors.

Mr Pleiter said there was already an "ever so slight" move for an increase in prices from tradesmen.