Fastest growing population in Australia presents housing, labour balancing act
Bringing in more people to address a housing crisis may seem counterproductive but the Australian state with the fastest growing population is wrestling with that balancing act.
The housing shortage crisis in Western Australia is at its peak, driven by a combination of factors, including population growth, increased build prices, rising borrowing costs, supply chain constraints, and labour and skills shortages.
One key focus is the labour deficiency. The Australian Bureau of Statistics (ABS) reported that WA had the fastest-growing population in the country in 2023, with a 3.3 per cent increase, driven mainly by net overseas migration.
Housing Industry Association (HIA) chief economist Tim Reardon noted that population growth has outstripped housing supply, adding pressure on rental and house prices. He emphasised the need for a stable and reliable migration program to meet housing demands.
In response, Western Australia and the federal government have reached an agreement to allocate 10,000 skilled migration places to the state for the 2024-25 period.
This aims to address critical skills shortages in sectors such as construction and boost the state’s economy and residential construction sector.
WA Premier Roger Cook emphasised the importance of this agreement in creating quality local jobs and addressing immediate labour shortages.
Training and Workforce Development Minister Simone McGurk highlighted the need for skilled migrants to fill positions that cannot be filled locally.
The increased migration allocation is expected to support ongoing economic growth and address the pressing need for more housing construction.
Overall, this strategic move aims to alleviate skills shortages, enhance economic growth, and meet the housing needs of Western Australia’s rapidly growing population.
While the government is working to alleviate labour shortages, the housing market still faces challenges with increased build prices, rising borrowing costs and supply chain constraints.
These factors indicate a continued rise in housing prices across Australia.
The key question is whether to invest in the escalating market or wait for a potential downturn. Historically, property has been a robust long-term investment, performing well as part of a diversified portfolio.
The cost of bringing a house, townhouse or apartment to market is now up to 40 per cent higher than it was three years ago and the struggles faced by faltering building companies is not helping the cause.
This increase can only be offset through price hikes, making a drop in prices highly unlikely. Despite this, building prices have increased by another 2 per cent this year, even though the growth in costs has slowed.
