As WA builders continue to struggle with a skilled labour shortage, the cooling iron ore price is being seen as a possible silver lining. The government is doing what it can to help, announcing the extension of a loan program for struggling builders.
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00:00Things are slowly starting to look up for Perth builder Jason Janssen.
00:08His business has just managed to hang on through a perfect storm of government home builder
00:13grants paired with a chronic shortage of labour.
00:17Very challenging times in the last two, three years.
00:20I wouldn't say depression, but a lot of stress, a lot of pressure, a lot of financial pressure.
00:25With builders brought to their knees, people have been left in limbo, waiting years for
00:30their homes.
00:31The state government is stepping in, giving eligible builders access to interest-free
00:36loans.
00:37Many builders were suffering from cash flow problems, so they couldn't finish off those
00:40homes getting through their crucial phases.
00:43Builders have been through a period where cost escalations have annihilated margins
00:48and they need some assistance because they can't legally pass on the price increase to
00:53their clients.
00:54Many of the workers needed to fix Perth's housing shortage are hundreds of kilometres
00:59north, working on mines in WA's resource-rich Pilbara.
01:03I think if there's a little bit of a slight cool down in the resources sector and we do
01:07get workers, that means that we're going to be able to build houses quicker, hopefully
01:12control the prices a bit more as well.
01:15There are signs WA's resources industry is cooling.
01:18Iron ore prices are dropping faster than expected due to slowing demand from China.
01:24I think undoubtedly the lower those iron ore prices come, the bigger the impact on
01:30the budget.
01:31I mean, it's the biggest contributor to the budget, bottom line, but WA Treasury is very
01:35conservative in its assumption.
01:38One of the reasons we do budget conservatively is because of the volatility of our commodity
01:43base.
01:44Now, Western Australia is, in a sense, a beneficiary of a significant royalty stream, but we're
01:51also vulnerable to the changes in the iron ore price.
01:54While cooling commodities are always a concern in WA, there could be a silver lining for
02:00the overcooked housing sector.