House building time could come down as demand shows no signs of letting up

Housing demand will continue to put pressure on building companies, Commonwealth Bank chief economist Stephen Halmarick warned at a business luncheon in Bunbury last week. Speaking to Bunbury business leaders, Mr Halmarick said strong demand would keep house and rent prices rising while housing applications were often held up by councils. “The biggest concern I think is also the supply of residential property is just too low everywhere across the country,” he said. “I think it’s just the difficulty of the construction sector to keep up with the demand from a big increase in net migration. “That’s going to continue to put pressure on house prices and rent which then creates pressure in many household budgets.” Housing Industry Association WA executive director Michael McGowan said labour and material shortages were a big cause of bloated construction times in recent years and despite wait times improving, workforce capacity was still an issue. “Through 2021 and 2022 it was a combination of a large volume of houses being at similar stages of construction, this impacted material and labour availability,” he said. “This was not something that was unique to the South West or WA, it was felt nationally due to a global increase in construction activity. “In 2023, the material challenges aren’t as great but the trades who are at the end of the home building process don’t have the workforce capacity to deliver at a faster rate.” Mr McGowan said it was important the industry didn’t make big changes too quickly. “We must be really careful over the next 2-3 years not to make knee jerk reactions to the challenges that have been thrown at the industry by COVID,” he said. “The building industry was stressed tested over the last three years, and it has identified areas for potential improvement. “This must be done in a way that doesn’t make it harder to build new homes as we head into a time where housing for our community is desperately needed.”