Access to skilled labour a barrier to 1.2 million new homes

The HIA Trades Report released today provides a quarterly review of the availability of skilled trades and any demand pressures on trades operating in the residential building industry.

"Australia's acute shortage of skilled trades remains despite the slowing in building activity," added Mr Devitt.

"The HIA Trades Availability Index sat at -0.58 in the first quarter of 2024, moderating from -0.64 at the end of last year. This is the least acute shortage of skilled trades across the country in almost three years, consistent with the slowing in building activity" added Mr Devitt.

"While this is a welcome improvement, it is still among the most acute shortages of skilled tradespeople in Australia since HIA first published this report in 2003.

"Even with home building pipelines shrinking rapidly under the weight of the RBA's rate hikes, public infrastructure projects have been absorbing a lot of skilled trades, as have mining and other non-residential projects.

"As a consequence, improvement in trades availability stalled for much of last year and the prices of these trades are continuing to rise much faster than usual.

"Trades prices increased by 6.2 per cent in the 12 months to March 2024 compared to an annual average rate of just 2.0 per cent before the pandemic," noted Mr Devitt.

This point is also made in Wednesday CPI data released by the ABS: "Higher labour and material costs contributed to price rises this quarter for construction of new dwellings," stated the ABS.

"Increasing the pool of skilled labour is essential if Australia is to build 1.2 million homes over the next five years. This will require two key policy actions from government," continued Mr Devitt.

"The first is to maintain assistance from the Australian government for those employers that train apprentices and directly for apprentices. Financial incentives which encourage the employment of an apprentice and improve retention have proved invaluable to helping the construction industry to access more workers. In addition, apprentice incentive funding opens up opportunities for those who seek a diverse and rewarding career in construction.

"The second is to allow the building industry to access skilled labour from overseas in order to respond to the boom-and-bust cycles caused by government policy settings.

"It is welcome to hear that the Australian government will be streamlining visas for in-demand jobs. Unfortunately, for some unknown reason, the government may be excluding a number of trades crucial to the home building industry.

"There is uncertainty around the possible exclusion of important home building trades, including bricklayers, carpenters, ceramic tilers, plasterers, joiners, concreters, roofers, painters, landscapers and plumbers.

"The ability to access skilled trades at times when building activity increases can assist in easing the acute shortage of housing," concluded Mr Devitt.

By region, quarterly readings can be volatile. Taking an average over the last six months, the most acute shortages of skilled tradespeople were in regional WA (-0.97) and regional SA (-0.95), followed by Adelaide (-0.85), Perth (-0.83), Brisbane (-0.69), regional Queensland (-0.63), regional Victoria (-0.59), regional NSW (-0.58) and Melbourne (-0.58). Sydney had the most modest trades shortage, at -0.51.

By trade, the most acute shortages in the first quarter of 2024 existed in bricklaying (-1.00), followed by ceramic tiling (-0.85), plastering (-0.74), carpentry (-0.74) and roofing (-0.70).

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