West Australia’s housing market is heading for oversupply, leading speculation of large-scale jobs cuts and reductions.

Dozens of workers have reportedly been laid off by big home builder Dale Alcock Homes in early May, and there are fears that this is just the tip of the iceberg.

Geoff Cooper, housing director for the Master Builders Association (MBA) of Western Australia, says the workforce will take a big hit as the demand for new housing sags.

“Demand is easing back across most residential building sectors,” Cooper told reporters for PerthNow.

“Alterations and additions might hold up better than others, but certainly new home construction markets we expect to weaken.”

Trades such as bricklaying, carpentry, wall and floor tiling have been in strong demand until recently, with the number of new homes surging from 20,130 in the 2012 calendar year to decade highs of 32,080 last year.

Bricklayers’ rates doubled from about $1 per brick to $2 per brick across the two-year period to October 2014, with demand forcing some builders to use alternative building methods such as modular construction purely to overcome the shortage.

Now there are strong signs of oversupply and a pullback in new housing construction.

The number of new housing and apartment approvals in the first three months of this year is down 12.5 per cent compared to its peak in the June quarter of 2014.

The Housing Industry Forecasting Group (HIFG) says new home sales are 14 per cent below their peak, reached last October.

The Housing Industry Association says that because of these factors, it expects new housing starts throughout Western Australia to drop by 14.7 per cent this year and 11 per cent the following year.

HIFG predicts housing starts will drop to 23 per cent from expected levels in 2014/15 in 2015/16.

At its peak last year, Western Australia’s construction sector employed more than 150,000 workers, but the Australian Construction Industry Forum says the sector could drop by over 10,000 workers in the next year or so.