High prices of housing will slow down the growth of the country's next boom since this will push labor shortages says an economist.

John Nicolaou, chief economist at the Chamber of Commerce and Industry Western Australia, said that this will hamper the nation's growth and the improvement of the living conditions of the people.

The Council of Australian Governments has commissioned a series of reports to benchmark progress on the country's performance on housing affordability, health care, indigenous issues and disability services. And the Federal Government research data revealed that Western Australia, which is the country's largest state, only had less than 10 per cent of homes and properties that were within the means of low and middle-income buyers.

Data noted that Queensland is a better performing state with 17 per cent of affordable homes while Victoria has the most affordable houses with nearly half of its homes affordable to the middle and low income groups.

Mr Nicolaou said Western Australia will eventually face labor shortages because housing affordability will discourage deployment of interstate workers.

Mr Nicolaou noted that the mining industry is not the only sector of the economy that will need more workers.

"We will need people across a whole range of different skill sets and across a whole range of different industries," said Mr. Nicolaou.

"That is why the issue of housing affordability is so important," he said.