Australia has a ‘thousand levers’ to pull to increase new home supply

“We have been advocates of looking at skilled construction labour complementing the labour that we have here in the country to assist in delivering the workbook and future housing,” he said.

“It continues to be extremely challenging, particularly as we still see significant infrastructure projects under way. In some of the smaller states that don’t have the depth of pools of labour, it’s a real barrier to delivery.”

Developers and builders have long been pushing for greater immigration of skilled tradespeople through measures such as fast-tracked visas, and have warned that cutting immigrant numbers would choke a key source of valuable workers.

The union movement – including the CFMEU – is a top donor to the Australian Labor Party and the federal government has not included construction skills on the list of priority occupations for visa applicants.

But Mr Penklis declined to say whether reporting by The Australian Financial Review, The Sydney Morning Herald, The Age and 60 Minutes that prompted the federal government to appoint an administrator to the CFMEU last week would allow for freer debate about migration reforms.

No single silver bullet

“I don’t think it’s one thing,” he said. “We need to work together with government. We need to work together with the unions. We need to work together with industry to create an environment where we can start getting buildings out of the ground that are affordable for Australians and it’s not one aspect that’s going to be the silver bullet here.”

There were some signs of easing in cost pressures on builders, Mr Penklis said.

“We’re definitely seeing some moderation and more capacity come back in the domestic segment of the market.

“We’re still seeing pressure in civil, and as you move to commercial and apartments, there are still the capacity constraints in the market, the challenges around productivity, the insolvencies that are playing through and there are still some segments of the subcontractor base that that is quite challenged.”

Mr Penklis was speaking at the opening of LIV Aston, Mirvac’s 474-unit build-to-rent development at Siddeley Street in Melbourne’s Docklands.

It is the third of five in the developer’s $1.8 billion build-to-rent venture with Mitsubishi Estate Asia and the federal government’s Clean Energy Finance Corporation – after LIV Indigo in Sydney and LIV Munro at Melbourne’s Queen Victoria Market.

It will be followed by the 396-unit LIV Anura in Brisbane’s Newstead and 498-unit LIV Albert Fields in inner-northern Melbourne’s Brunswick.

“We are committed to continue creating high-quality, next-generation build-to-rent assets and look forward to welcoming even more customers in the years ahead,” said Yuzo Nishiyama, Mitsubishi Estate’s Australia head.

To date, 70 leases have been signed and 50 residents have moved into LIV Aston.

Rents start at $620 a week for studio apartments and from $1300 a week for three-bedroom units. Rent increases – for residents taking out three-year leases – were set at a minimum of 4 per cent or the greater of CPI inflation or Melbourne’s rental price index, the company said.

“We are proud to be a part of this ambitious build-to-rent strategy which drives enhanced sustainability outcomes for tenants and plays an important role in the decarbonisation of Australia’s rental housing portfolio,” CEFC chief asset management officer Sara Leong said.

The next move by the developer, which has already said it intended to create a 5000-unit-strong portfolio of build-to-rent apartments, could be to develop projects or to acquire existing assets, said Angela Buckley, Mirvac’s build-to-rent general manager.