Canberra's high-density housing boom is set to slow dramatically in the wake of the COVID-19 pandemic, with predictions construction of new apartments will tumble by almost 60 per cent.
The alarming forecast is laid out in a new Housing Industry Association report, which predicts that up to 500,000 construction jobs could be at risk across the country due to a massive slowdown in the sector.
The association's report has prompted renewed calls for the ACT government to waive lease variation charges and streamline development approvals to help developers get their next project off the ground.
The association's report showed that construction work was expected to start on about 4300 dwellings in 2019-20, a 30 per cent decline on the previous financial year.
A slightly steeper drop is predicted for 2020-21, when the association expects work will start on just 3034 dwellings - the lowest level in at least a decade.
The forecast declines are driven by the expectation of a major slump in the apartment market. Work on about 1870 units was expected to start next year, down 60 per cent from the peak of the high-rise housing boom in 2018-19.
Housing Industry Association ACT executive director Greg Weller said the long-expected "cyclical downturn" in the apartment market had been accelerated by the COVID-19 crisis.
While the construction industry has been able to continue operating through the pandemic, there are grave fears for the sector once the projects currently under construction are completed.
Mr Weller said Canberra's apartment market would particularly suffer from the closure of Australia's borders, which has left thousands of international students stranded overseas.
He couldn't predict with any certainty how many of Canberra's 20,000 construction jobs would be at risk if the forecasts eventuated, but said the fallout would be "very significant".
Figures published earlier this week showed that employment in the ACT's construction sector had dropped eight per cent since mid March, the steepest fall in the country.
"We are very concerned," he said.
"If we do see a situation where we see a halving in the number of dwellings that are built, it certainly correlates that there are going to be a very significant number of people whose roles within the industry are at risk."
The Canberra Times this week reported the ACT government was considering changes to streamline the development approval process as part of efforts to support the territory's economic recovery.
Mr Weller said in addition to that, the Barr government should offer time-limited waivers of lease variation charges to encourage new projects.
"The government will miss out on that tax [revenue], but it will gain down the track from the employment that is generated and the income that is generated from rates," he said.
Meanwhile, the Master Builders Association of the ACT has the sounded the alarm about the ACT government's proposed labour hire laws, which are due to be debated in the Legislative Assembly on Thursday.
Labour hire companies would be need to apply for licences to operate as part of the strict regime.
The association's chief executive, Michael Hopkins, said the new rules would place extra burdens on Canberra's small businesses, many of whom relied on flexible working arrangements provided by labor hire firms.
"For many of the close to 10,000 Canberrans that lost their job in April, labour hire companies can provide flexible employment options which will keep people in work," he said.