Perth’s next price cycle may be shaped by a shortage of workers

Across the country, housing markets are cooling, established prices are falling, sales are slowing and buyers are waiting for clearer signals on interest rates.

To many people, this looks like a pause before conditions return to normal. Beneath the headline numbers, however, a quieter pressure is building in the construction industry, and it will shape how many homes get built and what they cost.

Developers and buyers tend to assume a softening market brings relief to construction as well, because falling prices should ease pressure on projects.

However, the latest Housing Industry Association (HIA) Trades Report suggests otherwise. Its Trades Availability Index shows a national shortage that is broadly unchanged from a year earlier, and trades prices rose 6.6 per cent in the year to September – more than double the rate of wage growth across Australian industries.

HIA warns that rising labour, materials and land costs, set against falling established prices, present a potential headwind for new homebuilding next year and beyond.

Labour does not reprice when values fall, so the cost of building can stay high while the price a new home can command shrinks. That gap, rather than the timing of the next upswing, will decide which projects proceed.

This makes the shortage more challenging than an ordinary shift in the property price cycle.

A project that clears planning and finance can still stall if the bricklayers, electricians or roofers it needs cannot be found.

And a stalled project is slower to deliver and more expensive to finish, even if the land and finance are secured.

The pressure is also uneven across the country. Melbourne sits close to equilibrium at -0.06, while Perth’s shortage is equal with Brisbane as being the most acute across capital cities.

This contrast suggests the constraint reflects local conditions, including the level of competing work in each market, rather than a fixed national shortage.

For those assessing projects, the practical implication is to treat labour availability as a variable in feasibility, alongside land and finance, rather than an assumption which resolves itself once prices stabilise.

The industry’s response is centred on training, apprenticeships and sensible settings for skilled migration.

The harder question is whether that response can arrive in time. Trades take years to develop and the homes Perth needs over the coming years depend on decisions made during this quieter period, when it is easy to assume there is no rush.

Governments, training providers and employers all share responsibility here and none of them can deliver the result alone.