A "perfect storm" of factors has made Perth the most expensive place to build in Australia during 2022, according to an international survey.
The International Construction Market Survey 2022, prepared by UK-based construction company Turner and Townsend (TT), examined the cost of construction in cities across the world.
It put the average cost of building in Perth at $4,109 per square metre.
The assessment showed costs in Perth rose by 14 per cent compared with last year, when Sydney, Melbourne and Brisbane were deemed more expensive.
"The cost escalation has risen significantly, and the current supply chain is unable to cope, especially when they're locked into fixed-price contracts," TT Western Australia cost management director Simon Monaghan said.
"And it's causing major issues with many contractors in the Perth market delivering for their contractual obligations."
According to the survey, the average cost of building in Sydney this year was $3,928 per square metre, compared with Melbourne at $3,880 and Brisbane at $3,814.
Projects cannot attract bids
Mr Monaghan told ABC Radio Perth's Damian Smith that the dramatic rise in costs for WA was linked to stimulus from the government, major infrastructure projects like the Metronet rail line, and other large-scale projects in health and education.
He said those factors, along with labour shortages, had led to a drop in market appetite for some government projects, which had been failing to attract tender responses.
"But when we do get that tender data back, we're seeing spikes of up to almost 40 per cent over what we would consider a reasonable benchmark [cost]."
Council struggles to attract tenders
City of Mandurah Mayor Rhys Williams said his local government had been unable to attract tenders to repair the roof of its aquatic centre.
"We're going to have to really think about the way that we approach this tender by breaking it down into parts," he said.
"Organisations are going to have to look at, particularly their procurement practices, and how they can make any sort of work they're trying to undertake more attractive."
WA Jobs and Trade Minister Roger Cook said the government was looking overseas to fill labour gaps.
"I was recently in the UK speaking with migration agents, and the Premier is over there at the moment, building up the profile of Western Australia to attract people," he said.
He said the Build A Life in WA campaign had been launched in the UK and Ireland to try to attract skilled migrants to the construction and health sectors.
Asked whether he regretted committing to multiple major infrastructure projects and home-building incentives, Mr Cook said it was done with "good intent."
"In hindsight, you can look back and say, 'We should have gone to this degree or to that degree'," he said.
"What we do know is, when we were in the guts of the global pandemic, there was a lot of fear, both from economists and the community, that our economy was going to tank because we didn't have the projects that we needed to stimulate the industry.
"We did those things under good advice."
